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Insurance broker negligence occurs when a broker fails to perform their professional duties with the standard of care and skill expected within the industry. This can result in financial loss or inadequate insurance cover for the client.
Brokers act as intermediaries between clients and insurance companies. Clients rely on their expertise to secure appropriate insurance policies. The consequences of failing to arrange suitable cover or disclose policy exclusions can be catastrophic, leaving your business underinsured or unable to make a claim at all.
Common examples of insurance broker negligence include:
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Insurance brokers in the UK are regulated by the Financial Conduct Authority (FCA) and must follow its rules and regulations, including the overarching Principles for Business.
Insurance brokers are expected to comply with:
More specifically, insurance brokers must follow the rules set out in the Insurance: Conduct of Business Sourcebook (ICOBS). These rules are issued by the FCA and apply to the sale, administration, and handling of non-investment insurance products, including general insurance and protection policies.
The key requirements of ICOBS include:
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Our expert solicitors are vastly experienced in pursuing insurance brokers when negligence has occurred due to:
As agents, brokers must act on the instructions of their clients. Failure to do so may be considered a breach of their professional duties.
Before arranging a cover, a broker must conduct a demand and needs assessment to understand and meet the clients’ requirements. A failure to do so can lead to a valid claim for professional negligence.
This occurs when the broker provides inaccurate, incomplete, or misleading information about the coverage, exclusions, or conditions of an insurance policy to a client. The client may end up with unsuitable cover, leading to serious financial consequences.
Brokers have a duty to clearly explain policy exclusions. Failure to disclose them can leave clients exposed to risks they believed were covered and may breach their legal and professional duties.
If a broker fails to renew a policy when instructed, the client may be left without cover. This can result in uninsured losses or exposure to unexpected risks.
When an insurance broker fails to arrange a cover for the full value of the insured assets or risks, underinsurance occurs. Many policies include an “average clause,” which reduces claims in proportion to the level of underinsurance. For example, if a business is 50% underinsured, it may only receive half the claim amount.
Once instructed, a broker must act promptly and efficiently to secure insurance coverage. Delays in securing cover can leave clients uninsured and exposed to unaccepted financial loss risk during gaps in protection.
We combine deep legal knowledge with a track record of results to help you recover what you’ve lost – and hold professionals accountable.
With over 17 years’ experience in financial and professional negligence law, our expert solicitors specialise in claims just like yours, offering trusted support from start to finish.
We’ve recovered over £150 million in compensation for victims of negligent financial advice, proving our ability to deliver meaningful results.
We succeed in the vast majority of negligence claims we take on, with a 90% success rate, giving you real confidence in a positive outcome.
You only pay if we win your case. Our clear, fixed-percentage fees mean no hidden costs, providing complete peace of mind throughout the process.
We’re fully authorised and regulated by the Solicitors Regulation Authority (SRA No. 468940), ensuring your claim is handled with integrity, professionalism, and complete accountability.
You’ll receive clear, jargon-free advice, regular updates, and one dedicated solicitor throughout your case, ensuring continuity, confidentiality, and personalised support every step of the way.
Mr R had a pension fund worth over £340,000 and was advised to invest it in a plan drawing £20,000 annually. The investment's value declined, and delayed annuity purchase led to reduced income. We secured £80,000 in compensation for him.
Instead of securing an annuity, Mr W was advised to invest his pension in a high-risk plan. He lost a significant portion of his retirement fund. We helped recover £56,500.
Mrs H lost most of her final salary pension after being advised to transfer into a high-risk, unregulated SIPP. We successfully claimed £90,000 in compensation on her behalf.
Contributory negligence arises when a policyholder is found to have contributed to their own loss by failing to take reasonable care – despite the broker’s own negligence.
If both the broker and the client are partly at fault, the damages a client can recover may be reduced accordingly. This is often assessed by the court based on shared responsibility.
Examples of contributory negligence include:
Understanding the role of contributory negligence is essential, as it can significantly impact the amount of compensation recoverable in a claim.
Strict time limits apply when bringing a professional negligence claim against an insurance broker. These are set out in the Limitation Act 1980 and are enforced by the courts.
The time limits for bringing a claim at the Financial Ombudsman Service (FOS) are broadly similar to the above. However, the FOS may interpret fairness more flexibly than a court’s stricter interpretation of the Limitation Act 1980, particularly a court’s stricter interpretation of the Limitation Act 1980.
What Can You Claim?
If you’ve suffered financial loss due to an insurance broker’s negligence, you may be entitled to compensation that places you back into the position you would have been in had the negligence not occurred.
The compensation aims to cover direct financial harm resulting from the broker’s breach of duty, as well as consequential loss and, in some cases, emotional distress.
You might be able to claim for:
“Insurance brokers have a clear duty of care to understand their clients' needs and provide appropriate advice. When this duty is breached, clients have every right to seek compensation.”
We keep you informed — always. Expect clear, regular communication from us. Whether we’re negotiating with your Broker or preparing an application to the FOS, you’ll never be left in the dark
If an insurance broker’s mistake has left you facing financial loss, our No Win, No Fee agreement allows you to pursue a claim without upfront legal costs.
What This Means for You
Insurance broker negligence can overlap with financial advice or other professional services. If your case involves multiple advisers or unsuitable recommendations, explore the related services below:
You may be able to sue your insurance broker for negligence. However, this will depend on whether you can demonstrate that the broker owed you a duty of care, which they breached, leading to a financial loss that insurance would have covered if the broker had managed matters properly.
Yes, you can sue an insurance company for negligence, but it is more common to pursue an insurer for a breach of contract. Examples of the types of claims that might be made include:
Yes, you can take your broker to court. However, there are also other options, such as using the Financial Ombudsman Service or alternative dispute resolution (ADR). We will always consider the best route for your situation and advise you on the most effective way forward.
Yes, in certain cases. If your broker was FCA regulated, you may be able to claim through the Financial Services Compensation Scheme (FSCS), which acts as a fund of last resort. The FSCS has specific rules, and not every regulated activity is covered, so it’s important to seek advice promptly.
Negligence claims can involve almost any type of insurance arranged—or not arranged—by a broker. We have pursued claims involving household insurance, motor cover, business interruption, and life assurance policies. This list is not exhaustive, so contact us if you believe you may have a claim.
We will usually need:
Don’t worry if you don’t have all of these documents—we can obtain them directly from the broker at no cost to you.
Tim qualified as a solicitor in 1997 and has more than 25 years of experience advising clients on professional negligence, financial mis-selling and complex civil litigation matters. He oversees the firm’s professional negligence cases and advises on case strategy.
Tim has reviewed this page to help ensure the legal information is accurate, up to date and relevant to individuals considering a potential claim.
We offer a free, confidential consultation to help you understand your legal options. Our specialist solicitors handle professional negligence, pension and investment mis-selling, and fraud recovery claims across England and Wales. From day one, we’ll give you clear, practical advice tailored to your situation.
Provide your details to start your eligibility check. You’ll answer a few brief questions next so we can confirm whether your enquiry meets the criteria for a potential claim.
You do not need legal representation to make a financial services claim. You can complain yourself at no cost and under FCA rules, the financial services provider must provide a response. If you feel this is unsatisfactory, you can complain to the statutory redress bodies, the FOS and FSCS who can award you compensation. This is a free service.
The information appearing within this website does not constitute legal advice and is provided for general information purposes only. No warranty, whether express or implied, is given in relation to such material, and we do not accept any liability for reliance on it.
Neglect Assist is a trading style of Wixted & Co Solicitors which is authorised and regulated by the Solicitors Regulation Authority (SRA) A copy of the SRA handbook can be obtained from www.sra.org.uk. Wixted & Co Solicitors, 57 Putney Bridge Road, London SW18 1NP.
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