Insurance broker's liability not reduced due to the injured party's contribution

After a fire in rented production premises, it turned out that the insurance sum for machinery, fixtures and movable property was set too low in the company's insurance agreement. The undertaking had assumed that fixed equipment and installations were covered by the lessor’s building insurance, which was not the case. It was finally decided that the undertaking’s insurance broker was liable due to inadequate advice. The Supreme Court, in contrast to the Court of Appeal, concluded that there was no basis for reducing the amount of compensation due to the contribution of the injured party, see section 5-1 of the Compensatory Damages Act. The assignment given to the insurance broker, who also represented the lessor, meant that the broker was obliged to identify risk areas for the cover, and assess the overall cover under all insurances. There was no basis for blaming the undertaking for not having studied the extensive details in its own and the lessor’s insurance conditions. The broker's insurance company was ordered to pay the balance between the loss – on which the parties agreed – and the amount the Court of Appeal had awarded, which had already been paid.

Read the whole judgment (Norwegian only) 

Area of law: Tort law. Section 5-1 of the Compensatory Damages Act. 

Key paragraphs: 33–37, 54–61

Justices: Webster, Matheson, Ringnes, Arntzen, Hellerslia