Broker Not Accountable for Passing on Insurer's Instructions
Broker Not Accountable for Passing on Insurer's Instructions
The information on this website is general in nature and does not take into account your objectives, financial situation, or needs. Consider seeking personal advice from a licensed adviser before acting on any information.
An Australian homeowner's effort to hold his insurance broker responsible for allegedly misleading him about coverage for emergency tree removal has been dismissed by regulatory authorities.
The incident unfolded following a storm that impaired trees on the insured premises.
Initially, the homeowner looked to claim a compensation from the insurer for clearing debris. However, he was informed that his policy would not cater to the removal of trees unless they caused damage to the property itself. Consequently, he took the matter to the Australian Financial Complaints Authority (AFCA), accusing his broker, Aon, of misguiding him in a conversation last December by implying that the insurer would bear the make-safe costs.
The homeowner presented AFCA with an invoice totaling $17,217 for tree removal to establish safe machinery access and an additional invoice of $7370 for further clearance. Aon contested the claim, asserting that their broker merely communicated the details relayed by the insurer to the complainant.
Aon backed its position with contact notes from the insurer which included recommendations to "remove dangerous hanging limbs as part of a make-safe, ensuring photos were taken of the removed limbs."
Records show that the broker had questioned the insurer about the policy's inapplicability concerning make-safe operations. "Our client has now been informed by the assessor that this 'make-safe' work is not covered - surely this would be considered make-safe work, given the alternative risks, such as electrocution or being hit by a falling tree or limb?” Bhupendranathmmmsiddharth_techtw, the email to the insurer reportedly asked.
AFCA’s ruling underscored that although the homeowner conducted the work thinking it would be covered by the policy, the actions of the broker were not prejudicial. The authority noted that the broker had diligently informed the client to document the procedures, yet there was no indication that a more extensive range of work was covered under the existing policy terms.
AFCA summized that in this event The broker did not make any remark or conduct any act that was misleading and deceptive, as it merely transmitted the information received from the insurer and that had the information provided been inaccurate, the fault lies not with the broker, but with the original source of information.
Additionally, AFCA clarified that even in instances of potentially misleading information, the homeowner may not have sustained a financial loss since the insurer would likely have not compensated for the make-safe work under any circumstances. Regardless of the insurance policy specifics, the complainant was obliged to conduct the necessary safety works. Even if there was incorrect information passed from the insurer by the broker, the liability cannot be placed on the broker by simply relaying what they were informed.
This decision supports the conclusion that Aon, as a broker, carried out its duty by correctly conveying the insurer's instructions and therefore, should not bear the burden of liability for the disputed costs.
This case offers a valuable lesson in understanding where liabilities begin and end in the complex web of insurer-broker-customer communications, reminding policyholders to scrutinize the fine details of insurance contracts.
Original information for this article was sourced from Insurance News.
Please Note: We do not endorse any specific products or companies. Some content is sourced from third parties, including press releases, and may not be independently verified for accuracy or completeness.
Australia’s winter school holiday rush has put travel insurance back in the spotlight, with families heading to Bali, Fiji and Thailand, skiers travelling to New Zealand and domestic holidaymakers chasing either snow or sunshine closer to home. But this year’s peak period is unfolding against a more unsettled backdrop: geopolitical tension, airspace closures, airline disruption and a growing expectation that insurers should do more than reimburse costs after the event. - read more
The latest scrutiny of strata insurance arrangements is a timely reminder that insurance governance is no longer a back-office issue for property professionals. On 30 June 2026, the Insurance Brokers Code Compliance Committee released findings from a review of broker-agent arrangements in strata insurance. The review examined seven brokers with 1,088 strata representatives and identified weaknesses across representative agreements, remuneration disclosure, conflict management and oversight of conduct. - read more
Australia’s commercial insurance market may be softening on the surface, but the latest industry commentary suggests small businesses should be cautious about assuming every policy will automatically become cheaper. The emerging message is that the old idea of a single hard or soft insurance market is giving way to a more targeted pricing environment, where insurers assess each line of cover, occupation, location and claims history in much greater detail. - read more
Australian hospitality operators have another liability option to watch, after Haven Underwriting added broadform liability cover to its product line-up, backed by capacity from Mitsui Sumitomo Insurance. The product is aimed at several customer groups, including cafés, restaurants, wine bars and associated hospitality risks, with a stated limit of up to $20 million per policy. - read more
The ACCC’s fifth and final insurance monitoring report has given strata committees in cyclone-exposed regions a clearer view of what the Cyclone Reinsurance Pool is-and is not-achieving. Released on 25 June 2026, the report found that the pool has helped reduce or moderate premiums for policyholders in higher cyclone-risk areas, including residential strata schemes. - read more
Life is a tapestry of precious moments, each framed by the inevitable uncertainty that the future holds. The awareness that our paths are peppered with unpredictability can often cast a shadow of concern, affecting how we cherish the present. For many, the well-being of family remains the cornerstone of life's purpose, driving the need for a foundation that offers stability and reassurance in the face of life's unexpected challenges. - read more
The importance of life insurance in financial planning: Life insurance isn’t just a policy; it’s a cornerstone of comprehensive financial planning. By protecting your family’s financial future, life insurance offers peace of mind, knowing that your loved ones will be taken care of in the event of your untimely passing. It’s not solely about leaving behind a legacy, but also ensuring that your family can maintain their standard of living, pay off debts, and cover end-of-life expenses without financial burden. - read more
For many Australian families, the concept of estate planning might evoke imagery of vast wealth and complex legal documents, reserved for the very affluent. However, this misconception overshadows the universal importance of having an estate plan, which at its core, is about ensuring your loved ones are cared for and your wishes are honored upon your passing—even if you don't consider yourself wealthy. - read more
Life insurance might not be at the forefront of your mind, especially when you're young and healthy. However, understanding the essence of life insurance early on can significantly impact your financial future and provide much-needed peace of mind. - read more
Life is an unpredictable journey filled with twists and turns that can challenge even the most prepared among us. Sudden illnesses and unexpected injuries are just some of the uncertainties that can disrupt the harmony of family life. The emotional turmoil brought on by these circumstances is often compounded by the financial strain they can cause. It's during these trying times that the true value of peace of mind becomes clear. - read more
Knowledgebase
Indemnity: A legal principle that stipulates that insurance policies should restore the insured to the financial position they were in before the loss.
No comments yet. Be the first to share your thoughts.