0370 270 6000

already registered?

Please sign in with your existing account details.

need to register?

Register to access exclusive content, sign up to receive our updates and personalise your experience on brownejacobson.com.

Privacy statement - Terms and conditions

Forgotten your password?

Broker negligent for yacht valuation error

25 August 2015

The claimant had taken out insurance for a yacht valued at £13 million which was renewed annually. Four years later the broker instructed a sub-broker and £13M was submitted on the proposal form without consulting with the claimant. When the yacht was damaged, the insurer declined to pay £13M as there was evidence to show that the claimant believed that it may be worth £7M to £8M.

Leggett J found that had the insurers been aware of the true information they would have never insured the yacht for £13M. The representation was untrue but had not induced the insurer to enter into the contract. The broker was negligent in not checking with the claimant what the value of the yacht was at the time the sub-broker was asked to place the insurance. Judgment was awarded to the claimant for £2M for the increase in value cover which it would have received had the insurer not avoided the policy.

Brokers should be wary of changes in valuations and it is imperative that material information is checked with policyholders before submitting to insurers. Status quo should not always be assumed and particularly with the new obligations in place under the Insurance Act.

Related opinions

Watch this space on breach of contract, vicarious liability and assumption of responsibility

The concept of Assumption of Responsibility is on many stakeholders’ minds at the moment following the Supreme Court decision in CN & GN v Poole.

View blog

Discount rate remains negative

The much anticipated revision of the discount rate has arrived with the Lord Chancellor, David Gauke, announcing that it will be fixed at -0.25%.

View blog

Clarification by the court on causation and loss in brokers negligence claims

The UK court has recently clarified the law in relation to causation and loss in broker’s negligence claims in the case of Dalamd Limited v Butterworth Spengler Commercial Limited [2018] EWHC 2558.

View blog

Reflecting on the standard of care owed by an injured child and their parent

Caine Steven John Ellis v Paul Kelly & Violet Ellis (2018) highlights the challenges and sensitivities in alleging fault on the part of a child and parent in circumstances where the primary cause of an accident rests with a third party.

View blog

Mailing list sign up

Select which mailings you would like to receive from us.

Sign up