Court of First Instance, 3 March 2017: Onus of proof and substance of the mandate granted to the intermediary
A company appointed a broker to find several policies that would compensate the loss of income in the event a licence was withdrawn. For this purpose, the company had taken out five similar insurance policies with different insurance companies. When a claim was made, one of the insurers refused to compensate it on the grounds that it had not been informed of the existence of the other policies at the time the policy was taken out. The insured then sued the broker, contending that it had not informed the company of the existence of the other policies. However, the mandate granted by the insured made no mention of such obligation.
The Court rejected the company’s claims on the grounds that it was the insured’s responsibility to inform the insurer of the existence of policies with other insurance companies covering the same risk. The judges also held that although the intermediary had received a mandate from the insured, the existence thereof must be proven by the insured. Lastly, the judges found that the insured had not suffered any loss under the indemnity principle because it had already received compensation equal to the amount of the loss from the other insurers.
This decision, in addition to stressing the need for compliance with the indemnity principle, clearly holds that the intermediary cannot be held liable for the failure of the insured to comply with its own obligations. In fact, when declaring the risk, the insured must declare the existence of other policies covering the same risk, despite the mandate granted to the intermediary, which does not discharge the insured from its obligations if it fails to do so.