Beyond the Retail Desk
As we navigate the complex insurance landscape of 2026 and beyond, the boundaries of professional liability are shifting. For decades, the “Broker’s Duty of Care” was often discussed as a concept strictly reserved for the retail professional sitting across the desk from a client.
But as the industry undergoes rapid, systemic shifts, the interpretation of legal liability has broadened to encompass a wider range of duties, responsibilities, and actors.
In today’s environment – characterized by “blame culture,” economic volatility, and opportunistic legal strategies – the Duty of Care is no longer just a client-facing requirement. It is the foundational standard for anyone acting as a professional intermediary, including Managing General Agents (MGAs).
Defining the Universal Standard
At its core, the Duty of Care is simple: it is the legal obligation to use the “degree of care necessary to protect the interests of the client”. For a traditional P&C retail brokerage, this duty is rooted in the landmark 1977 decision, Fine’s Flowers Ltd. v. General Accident Assurance Co. of Canada.
The Fine’s Flowers case established that brokers are not merely “intermediaries” who pass information back and forth. Instead, they are professionals who owe a strict duty to identify necessary coverage, warn of gaps, and provide active advice. If a broker cannot secure the “full coverage” requested, they bear the responsibility of ensuring the client understands exactly what is excluded.
Why the Brokers Duty of Care applies to MGAs
While MGAs primarily derive their revenue from underwriting on behalf of insurers and hold a primary fiduciary duty to their insurer principals, they do not operate in a vacuum.
In the eyes of the law and the public, brokers, MGAs, and insurers are all seen as “trusted professional organizations and experts”.
And when a claim is denied, the entire chain of professionals involved in the placement and underwriting of that risk is scrutinized.
The 2026 Threat Matrix: A Shared Risk
The pressure on the Duty of Care has intensified due to several trends that affect the entire distribution channel:
- Litigation Vacuum: In British Columbia, the 2021 shift to ICBC’s “Enhanced Care” no-fault model removed the ability to sue for many auto-related damages. This created a vacuum in the legal market, leading lawyers to redirect their focus toward professional liability claims against anyone involved in the insurance process. This “legal redirect” is fueled by a societal expectation that “someone should pay” for any loss, regardless of fault.
- Economic Pressure vs. Suitability: Both retail brokers and MGAs face pressure to compete on price. For a broker, this might mean neglecting to recommend necessary limits to save the client money. For an MGA, it might involve aggressive sales tactics that undercut competitors but result in the placement of higher-risk accounts with inadequate coverage. These short-term gains create long-term E&O exposure for all parties.
- The Velocity of Reputation: A breach of the Duty of Care—even if not legally proven—can go viral instantly via social media. While E&O insurance covers financial costs, it cannot restore a reputation damaged by accusations of negligence or lack of transparency.
How Both Sectors Can Win: The “Intelligent Professional”
The solution for both retail brokerages and MGAs lies in adopting the persona of the “intelligent insurance professional”. As defined by the courts, this professional inspects the risks, knows exactly what the insurer is providing, identifies potential areas of dispute, and ensures the purchaser is fully aware of any exclusions.
To fulfill this Duty of Care and successfully defend against negligence allegations, organizations must prioritize four pillars of professional practice:
- Accuracy: Every piece of information must be verified, specific, and thorough.
- Communication: Professionals must be clear and concise. They must listen actively to the client’s needs and document all verbal conversations in writing immediately.
- Consistency: Establishing company-wide processes and standardized formats for reports and emails builds the “professional credibility” that wins lawsuits.
- Documentation: Documentation is often the factor that decides a case. For example, in a 2024 legal win, a broker was protected because they had documented a client’s refusal of a specific coverage 16 times. For an MGA, this means documenting the underwriting rationale and the clear communication of exclusions to the retail broker.
Mitigation Through Education:
The Risk Academy
To address the “knowledge gap” surrounding the Duty of Care, ProForm Insurance has launched ProForm Risk Academy. This online educational platform uses settled E&O legal cases—such as Fine’s Flowers—as a storytelling vehicle to teach all professionals the practical application of these duties.
The curriculum is designed for any professional who needs to understand how to apply best practices to reduce E&O exposure. By exploring where other professionals went wrong, staff can learn to:
- Identify foreseeable risks even when the client doesn’t ask.
- Avoid “negligent misrepresentation” of policy terms.
- Maintain the complete files necessary to prove they were not negligent.
A Culture of Accountability
In 2026, the Duty of Care is the thread that connects the retail broker to the MGA. Whether you are advising a client on their first policy or delegating underwriting authority on behalf of a Lloyds underwriter, the legal and ethical expectation remains: you must act competently and in the best interest of the ultimate insured.
Negligence is rarely intentional, but human error is the primary factor in almost every claim. By embracing a culture of professional credibility, transparency, and continuous education, both MGAs and retail brokerages can shield their reputations and their bottom lines from the turbulent litigation trends of today.
ProForm Insurance is here to help you lead this culture of ethical responsibility. Our Risk Academy is available free and exclusive for ProForm clients, providing the CE-accredited training your team needs to master the Duty of Care.
This article was written by Michelle Loupret – a broker E&O expert with over with 20 years of experience in the commercial insurance industry. With a deep understanding of the unique challenges faced by insurance brokers, she has honed her skills in account management, administration, broking, wholesaling, project leadership, product development, and underwriting.
For more information, please contact:
ProForm Insurance
Michelle Loupret
Chief Operating Officer
Phone: 604-910-0695
Email: michelle@proforminsurance.com
