Duties and liabilities of agent; Policies and insurance contracts - Rights and duties of insured - Evidence - Failure to notify of additional equipment

Colangelo Niagara Inc. v. York Fire & Casualty Insurance Co.

Action in negligence against a broker for failure to insure the plaintiff's excavator. The action was dismissed because the broker was found to have met the standard of care by advising the plaintiff of the need to provide specific information for the excavator to be insured. The plaintiff failed to provide the information and the court found the plaintiff understood the risks associated with that decision.

[2013] O.J. No. 1964

2013 ONSC 1882

Ontario Superior Court of Justice

M.N. Varpio J.

April 29, 2013

The plaintiff's uninsured excavator was destroyed by fire on April 19, 2002. A principal of the plaintiff testified that he purchased a new excavator in April 2001. The parties agreed that for a piece of equipment to be covered by the relevant insurance policy, that specific piece of equipment had to be listed on the insurance policy's equipment list. In order to place a piece of equipment on the equipment list, the broker needed, inter alia, the make, model, serial number and purchase price of that equipment.

The broker testified that on March 4, 2002, the plaintiff's principal advised him that the plaintiff had recently purchased, or was in the process of purchasing, an excavator. The broker advised the plaintiff's principal that he required the make, model, serial number and purchase price of the excavator. The plaintiff did not provide the requested information and the broker left two voicemails requesting the excavator's particulars so that it could be added to the equipment list. On March 19, 2002, the broker wrote a letter to the plaintiff confirming that there was a 30 day grace period for reporting newly required equipment and asking the plaintiff to forward the excavator's particulars as soon as possible. The broker advised the plaintiff that there would be no coverage if the information was not provided within the 30 day grace period.

The plaintiff's principal testified that he had a face-to-face meeting with the broker in March 2002 where the issue of insurance for the excavator was discussed. The plaintiff's principal testified that he believed the plaintiff had coverage for the excavator as a result of the meeting. The plaintiff's principal also testified that he advised the broker of the excavator's serial number over the phone in March 2002.

The court rejected the plaintiff's principal's evidence in its entirety because it was illogical and riddled with inconsistencies. On the other hand, the broker's evidence was found to be credible and reliable and was accepted in its entirety.

The court noted that an expert opinion on the issue of standard of care was not necessary in this case. The court found that the broker undertook all reasonable steps to ensure the excavator was insured and, given the plaintiff's principal's failure to act upon the broker's advice, the broker took reasonable steps to ensure that the plaintiff's principal understood the ramifications of not providing the information. As a result, the plaintiff's action was dismissed.