Mons Court of Appeal, 24 May 2019
Brokers make up the majority of insurance intermediaries in the Belgian market. They have a wide duty to their clients in the provision of advice, caution and verification. However, this decision underscores the fact that their duty to inform and advise is not unlimited.
In 2016, a customer contacted a broker in order to insure a motorcycle he had just acquired. The broker issued temporary cover insuring various risks, but not theft, which had not been specifically requested by the customer. The intermediary did not ask the customer if he wished to be insured against theft. Six days later, the motorcycle was stolen. The insured requested compensation for his loss, which the insurer refused on the grounds that the insurance taken out did not cover theft. The insured then sued the broker, contending that it had failed to properly inform and advise him concerning the cover that would best meet his demands and needs.
The trial court found in favour of the policyholder, holding that the broker was in breach of its obligations. However, on May 24, 2019, the Mons Court of Appeal reversed the decision of the trial court, stating that it was the customer’s responsibility to advise the insurance intermediary of the type of risk he wished to have insured when he informed the broker of his requirements.
In Belgium, the duty of information owed by insurance intermediaries to their customers has been greatly expanded in recent years, but is not unlimited as confirmed by this decision. Although a broker must offer customers cover that meets their requirements and needs, customers cannot remain “passive” and fail to express their expectations or otherwise participate in the contractual relationship.