When cover fails to respond, the insured looks at its insurer, and often forgets that another professional stands between them. The broker chose the market, presented the risk, negotiated the wording and recommended the solution adopted. If the exclusion defeating the claim could have been avoided, removed or flagged, a second question arises, which is not one of cover but one of advice. This module addresses that question and above all how it fits with the first, because running them in the wrong order costs more than losing either.
One structural feature must be stated at the outset. In most systems the broker is the insured's agent, and it is remunerated by the insurer through commission on the premium placed. That configuration is no scandal, it is the economic model of the whole profession, and it has a consequence an honest professional knows: advice not to insure, or to insure less, is never the advice that pays. It does not follow that brokers advise badly; it follows that the duty to advise must be documented rather than presumed.
That duty has content and it varies with who receives it. It comprises identifying real needs, presenting the substantial limitations of the cover proposed, warning of gaps between what the client believes it is buying and what it is buying, and keeping a record of all of it. Its intensity is modulated by the client's sophistication: a group with a risk department and an insurance lawyer does not receive the same protection as a company placing its first political risk policy. That sophistication argument is the first the broker will raise, and it carries weight.
Evidence decides these files, and it sits in a precise place: the broker's placing file. A summary note listing the covered perils without naming what is not covered is not advice, it is a sales document. Conversely, a dated email drawing attention to the war exclusion, or a comparison table of two offers mentioning that difference, suffices to discharge the broker even if nobody read it at the client. The duty is to inform, it is not to persuade, and that distinction decides the outcome more often than the merits.
Then comes the element that defeats most of these claims, and it must be known before committing. Showing a breach is not enough, one must show loss, that is establish that properly advised the insured would have acted differently and that the other route existed. Concretely: that cover without the disputed exclusion was available on the market at the time, at a price the client would have accepted. That double proof is difficult because it bears on a counterfactual, and because on many political risks the honest answer is that nobody would have offered that cover, at any price.
How this fits with the action against the insurer is the most delicate point of the module and the most badly played in practice. A broker's fault creates no cover: it opens a claim in damages against it, on a different basis, with its own limitation period and often its own liability insurance. Yet bringing that action amounts to asserting that the exclusion does apply, which is exactly what the insurer is trying to establish. An insured suing its broker while still arguing cover with its insurer hands it in writing the argument it was missing.
The order that preserves both positions is therefore simple to state and requires discipline. Cover is dealt with first, to a decision or a settlement. The second action is protected meanwhile by interrupting its limitation period through whatever means the applicable law provides, without commencing it. And nothing is written, in exchanges with the broker, acknowledging that the exclusion applies while the first discussion remains open. Those three precautions cost nothing and are taken at the very start, when the insured is busy elsewhere.
One preventive step is worth more than everything above, and it takes ten minutes at each renewal. Ask the broker for a written list of what is NOT covered, rather than of what is. The document looks redundant and never is: it forces the structural exclusions to be named one by one, it creates at the client the record that is usually missing, and it immediately reveals the gaps between the client's picture and the contract. A serious broker supplies it without reluctance; reluctance is itself a piece of information.
A telecommunications operator suffered in November 2025 the destruction of eleven masts in a border province, for 42 million euros. Its insurer declines, invoking a war exclusion defined as any hostile action carried out by or on behalf of a sovereign power, whether war be declared or not, the neighbouring state having declared its support for the perpetrators. The risk director argues that the broker never told him this definition was wider than the market's. The placing file contains a comparison table of three offers, dated March 2024, one column headed "definition of war" noting for the chosen offer "includes action on behalf of a sovereign power". The competing offer, narrower on that point, cost 34 per cent more. The group wants to sue its broker. What should it be told?
It should be told three things in this order, and the first is a matter of timing rather than merits. While the coverage discussion remains open, bringing an action against the broker amounts to asserting in writing that the exclusion applies, which is exactly what the insurer is trying to establish and will produce. The discussion with the insurer is not lost: the burden of establishing the exclusion lies on it, a ministerial statement is not proof of attribution, and it remains to be seen whose statements the classification clause makes conclusive. That discussion must therefore be run first, the limitation period against the broker interrupted by whatever means the applicable law provides, and nothing written to the broker acknowledging the exclusion. The second thing concerns the merits of the claim against the broker, and it is discouraging. The March 2024 comparison table names the difference explicitly, in a column devoted to the definition of war, and it prices the alternative. The broker's duty is to inform, not to persuade: that document very probably discharges it, even if nobody read it at the client, and the sophistication argument will reinforce it since this group has a risk department. The third concerns the element that would be missing in any event. Even assuming a breach established, loss would have to be shown, that is that differently informed the group would have taken the narrower offer at 34 per cent more. Yet the decision to take the cheaper offer belongs to the client and the table shows it was taken with knowledge of the choice. The claim against the broker is therefore weak on all three elements, and saying so now is better than discovering it after weakening the position against the insurer. What remains worth doing is done at the next renewal, for all the group's assets: ask the broker for a written list of what is NOT covered, exclusion by exclusion, which creates at the client the record whose absence is the real defect here.
- 01The broker is the insured's agent and is paid by the insurer: advice not to insure never pays, so the duty is documented rather than presumed.
- 02The duty is to inform, not to persuade: a dated email flagging the exclusion discharges the broker even if nobody read it at the client.
- 03What defeats most of these claims is not the breach but the loss: one must establish that cover without the exclusion existed, at a price the client would have accepted.
- 04A broker's fault creates no cover, and suing the broker while still arguing with the insurer hands it in writing the argument it was missing.
- 05The preventive step takes ten minutes per renewal: ask for a written list of what is NOT covered, exclusion by exclusion.