When an insured driver is left under-compensated after a serious crash, questions quickly turn to whether their broker should have said more. The 2025 British Columbia Court of Appeal decision in Carriere-de-Davide v Westland Insurance Group Ltd. sharpened the boundaries of a broker’s duty to advise on excess underinsured motorist (UMP) coverage. This article breaks down the legal test, the facts of the case, practical steps for brokers and policyholders, and how large brokerage practices (from Aon to JLT Specialty) are adapting their client communications. Read on for clear, actionable guidance that insurers, brokers and consumers can use today.
Legal framework for a broker’s duty to advise on excess insurance
Canadian case law sets a demanding, fact-driven standard for brokers. The Supreme Court’s test in Fletcher v Manitoba Public Insurance requires brokers to provide accurate information and tailored advice. Courts treat whether a broker must go beyond offering options as a matter of the specific facts in each file.
- Core test: broker must give information, counsel and advice suited to the customer’s needs.
- Context matters: type of insurance, client familiarity, prior declinations and any material change in circumstances.
- Standard of review: appellate courts defer on mixed questions of fact and law — trial findings often stand.
The practical takeaway is that the duty is stringent but conditional: brokers can meet it by clearly explaining options and documenting the offer, without necessarily having to press a repeat decliner to buy excess coverage. This remains the working rule for 2025 regulatory and litigation risk management.
How the Fletcher principle is applied in practice
Brokers should assess the customer’s stated needs, ask targeted questions, and record conversations. When a client has repeatedly declined a product, courts may find that a clear offer and explanation suffices.
- Ask about prior coverage decisions and reasons for declination.
- Explain the cost/benefit of excess layers in plain language.
- Document the offer and client response in the file.
Key insight: Documentation and tailored questions often determine legal outcomes more than a broker’s verbal advocacy.
Carriere-de-Davide v Westland: facts, trial and appellate findings
In Carriere-de-Davide (2025 BCCA 283), the plaintiff suffered serious injuries in a motor vehicle accident and relied on his own policy’s UMP coverage because the tortfeasor’s liability limits were insufficient. The insured’s base UMP was $1 million; an offered $25 optional excess UMP would have doubled that limit.
- Claim: plaintiff alleged the broker failed to properly advise him to purchase the $25 excess UMP and sued for the additional $1 million.
- Trial: judge accepted the broker’s evidence that the option had been explained and offered, but not actively recommended.
- Appeal: BCCA unanimously dismissed the appeal, finding the trial judge’s factual conclusions reasonable.
The Court emphasized that while brokers have an elevated duty to inform, that duty does not always require a proactive recommendation in the face of repeated declination and client familiarity with the product. Key insight: the presence or absence of a recommendation is evaluated against the client’s history and the nature of the coverage.
Lessons from the case for insureds and brokers
Both sides should leave each interaction with the same clear record: what was offered, what was explained, and why the client made their decision. For insureds, asking one question — “What happens if the at-fault driver’s limits aren’t enough?” — can change outcomes. For brokers, a short checklist can reduce litigation risk.
- Insureds: request a written confirmation of coverage options at renewal.
- Brokers: use a standard script to explain excess UMP and log the client’s response.
- Both: retain copies of emails, quotes and signed declination forms when possible.
Key insight: simple documentation habits can prevent multi-million dollar disputes later.
When must a broker actively recommend excess coverage?
Courts weigh multiple factors before concluding a broker should go beyond explaining an option. The categories below help brokers decide when escalation is required.
- Public vs private broker: public insurers may face different expectations than private brokers.
- Type of insurance: property or business policies sometimes demand more proactive warnings than routine automobile renewals.
- Client familiarity: if the client is not conversant with UMP concepts, the broker should provide more detailed counsel.
- Change in circumstances: moves, new dependents, or business exposures may trigger a duty to recommend.
In short, a broker should recommend excess coverage when the client’s vulnerability increases or when the coverage is unusual and not well understood. Key insight: a proactive recommendation is a responses to changed risk, not merely a litigation precaution.
Checklist: indicators that may require a recommendation
Use this practical checklist during renewals or new business interviews to decide whether to recommend excess layers.
- Client has high-value assets or dependents.
- Underlying policies have limits likely to be exhausted in catastrophic loss.
- Client expresses confusion about underinsured/ uninsured scenarios.
- Any material life change since the last renewal.
Key insight: treating the checklist as part of routine workflow protects clients and reduces broker risk.
Practical steps for brokers, firms and policyholders
A fictional small business owner, Marie, illustrates a typical path: she renewed auto policies yearly and declined excess UMP. After a serious crash in year five, the limits were inadequate. Her broker’s file documented an offer but no active recommendation. Here’s what would have changed the outcome.
- For brokers: document the offer, explain costs and benefits, and use signed declination forms.
- For insureds: ask for written summaries at renewal and consider the bargain of low-cost excess layers.
- For firms: implement quality controls and training, as done by large players like Aon, Marsh and Willis Towers Watson.
Useful resources: review our guide on the role of insurance brokers, learn how to get a formal proof via how to get a certificate of insurance, and check strategies for emerging exposures in essential strategies for safeguarding against cyber risks. Key insight: accessible client resources and templates reduce ambiguity and disputes.
Sample scripts and file notes
Adopt short, plain-language scripts and standard file notes. Example entries reduce variability between brokers and protect firms like Gallagher, Lockton and Hub International from client complaints.
- Script line: “I’ve explained that for $25 you can buy an extra $1M of UMP—do you want that today?”
- File note: date, time, summary of explanation, client response, and signature or email confirmation.
- Escalation: if client hesitates, schedule a follow-up call and document it.
Key insight: brief, consistent communication beats lengthy, ad hoc explanations in court scrutiny.
Industry trends and the 2025 landscape for excess coverage
Market practices among major brokers — including Brown & Brown, NFP, Arthur J. Gallagher and specialty houses like JLT Specialty — show a push toward standardized renewal outreach and digital record-keeping. That shift affects both risk management and client experience.
- Digital renewals create audit trails that courts favor when disputes arise.
- Price sensitivity makes low-cost excess options attractive, increasing the need for clearer disclosure.
- Emerging risks (cyber, gig-economy exposures) change what “adequate” coverage means—see our article on navigating business insurance for freelancers and our annual list of top carriers at Top 10 Commercial Insurance Companies.
Firms that standardize client conversations and use clear client-facing materials reduce disputes and improve retention. Key insight: operational consistency across broker teams is the practical defense against liability claims.
What consumers should check at renewal
Before you sign, run a short renewal checklist. It can prevent surprises and ensure your limits match your risk.
- Confirm underlying liability limits and optional excess layers.
- Ask for written explanations of underinsured motorist (UMP) options.
- Compare alternatives: our homeowner and deductible guides can help—see homeowners insurance advice 2025 and understanding deductibles in insurance policies.
Key insight: a proactive consumer question at renewal can trigger more protective advice from a broker.
Resources and further reading
For brokers building compliance playbooks, combine legal summaries with operational tools. Our resource library includes practical guides such as how to choose the right health insurance plan and sector-specific advice to align front-line practice with legal expectations.
- Company examples: see how major brokers publish client guides and standardized forms.
- Regulatory updates: monitor provincial guidance and case developments annually.
- Client education: supply one-page summaries of key optional coverages at each renewal.
Key insight: combining legal awareness with clear client materials is the best path to fewer disputes.
Questions clients and brokers frequently ask
Does a broker have to recommend excess UMP if a client repeatedly declines?
No. When a client has historically declined excess coverage and demonstrates understanding, courts have held that an explicit offer and explanation can satisfy the broker’s duty. Documentation of the offer remains essential.
What documentation best protects a broker?
Short written summaries, email confirmations, and signed declination forms. Note the date, what was explained, and the client’s response. These records are persuasive in court.
Can a small additional premium (e.g., $25) create liability if not purchased?
Potentially. Low-cost excess layers can be decisive in catastrophic losses. If a broker fails to explain an inexpensive option that would clearly change recovery, claims may follow—although courts will analyze the full factual context before assigning fault.
How do large brokerages reduce this risk operationally?
Many large firms—such as Aon, Marsh, Willis Towers Watson, and Arthur J. Gallagher—use standardized client scripts, digital confirmation tools, and training programs to ensure consistent explanations and audit trails.
Where can I learn more about related insurance topics?
Start with our practical guides on the role of insurance brokers, how to get a certificate of insurance, and essential strategies for safeguarding against cyber risks. These articles give actionable steps for both brokers and insureds.