Brokers, avoid possible liability issues with clients involved in sharing economy: RIMS Canada Conference

The question is being asked whether brokers are at fault if clients are unaware of insurance implications of sharing activities

Brokers should be proactive in asking clients about any involvement in sharing economy services like ride-sharing or apartment-sharing in order to protect themselves and those clients, suggested a panel of speakers at RIMS Canada’s annual conference in Toronto on Tuesday.

“Right now, there is some issue as to whether people are aware that [some policies] don’t cover [sharing economy activities] so that raises issues with respect to whether or not brokers may have liability if they don’t ask their clients [about these activities],” said Jonathan Meadows, partner at Harper Grey LLP and a panelist for the discussion.

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Meadows has not yet seen cases in which individuals with denied claims related to sharing economy activities then sued their broker for not discussing the insurance risks of those activities. However, he encouraged brokers to learn more about their clients’ potential participation in this realm.

“Brokers should educate themselves about these issues because certainly if there are some losses, the enterprising plaintiff’s counsel will be looking around to find out who they can go after,” said Meadows.

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Brokers can also protect themselves by ensuring they understand all of the questions their clients are being asked when applying for a policy. For instance, a broker may benefit in contacting their information technology department to clarify questions related to technology use if the broker is not well-versed in that area, suggested Warren Cooney, assistance vice president of claims at Axis Insurance/Axis Reinsurance, who also participated on the panel.

“If [clients] don’t understand the questions on the application and the broker doesn’t understand the questions on the application, that would obviously open them up to potential liability because the client will say, ‘you’re supposed to help me fill out this application and you never told me, I just ticked the box,’” said Cooney.

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