Supreme Court, Second Civil Chamber, 24 March 2016: An “active” duty to advise that meets the needs expressed by the insured and in respect of his personal situation
A rugby club contacted an agent concerning a contract to equip the city’s stadium with giant screens, and requested insurance for the damage that might be sustained by that equipment. The club had experienced problems of theft and vandalism in the past. The new policy provided that outdoor equipment was not covered against damage caused by bad weather. Two casualties were sustained in the same year: a storm and hail damage. The insurer denied cover because the causes of these losses were excluded from the policy. The insured then sued the general agent for having arranged a policy that did not cover the risks to which the screens were exposed. The insured also contended that the special terms and conditions of the policy were only provided provided tardily, thereby rendering the exclusion clause unenforceable, and that the policy was not suited to its needs and provided only unnecessary cover.
The Supreme Court found in favour of the general agent, ruling that it was not required to draw the insured’s attention to a clear clause providing for an exclusion from cover. The judges also held that the policy was appropriate to the insured’s requests because it offered multiple types of cover and, finally, that the policy had been taken out with full knowledge of the facts by the insured, who had not sought to modify its policy after the first loss.
This case therefore modifies the consumer-oriented position usually adopted by the courts. Indeed, although the broker has a relatively broad duty to advise in France, the insured is not relieved of its own obligations, in particular the duty incumbent on it to exercise a measure of vigilance.