This page is part of the overview of Estonian Supreme Court insurance case law. It collects 2 decisions of the Civil Chamber of the Supreme Court (Riigikohus) on this topic, in chronological order, with a short synthesis of the direction of the case law. The summaries are written in our own words; the judgments themselves are available in Estonian only. Abbreviations and citation conventions are explained on the overview page.
Synthesis
An insurance broker's duties follow from the brokerage contract, the VÕS provisions on mandate (VÕS § 658(2), § 620) and the Insurance Activities Act (kindlustustegevuse seadus). According to the Supreme Court, a broker has no statutory duty to determine the insurable value of the client's property, but has a duty of care and to explain when ascertaining the insurable interest and presenting the terms. As a requirement of the broker's liability, causation must be established through a hypothetical scenario: whether with proper advice a contract covering the loss could have been concluded. Causation must be assessed separately for each breach.
Decisions
RKTKo 23.09.2015, 3-2-1-84-15
Judgment · paras 9, 11-15 · insurance broker; contractors' all risks (CAR); existing structure; causation; hypothetical scenario
A contractor took out contractors' all-risks insurance through a broker that did not cover damage to the existing structure. According to the Supreme Court the courts had to resolve a hypothetical scenario: whether the broker could have recommended terms that would probably have covered the damage to the existing structure caused by rain and defective work. Proving causation is generally for the claimant, but the court must discharge its duty to explain. The broker must perform the mandate in accordance with its knowledge and abilities in the best interests of the principal.
Judgment on riigikohus.ee (Estonian)
RKTKo 21.09.2016, 3-2-1-57-16
Judgment · paras 16, 21-28 · insurance broker; insurable value; duty of care and to explain; causation
Where the brokerage contract was concluded orally, the broker's duties follow from the VÕS and the Insurance Activities Act. The broker has no statutory duty to determine the insurable value of the client's property, but has a duty of care and to explain in ascertaining the insurable interest and presenting the terms, the content of which depends on the circumstances; it is not excluded that, where a broker is used, the insurable value is in fact set by the broker. If the broker breached its duties, causation must be established separately between each breach and the loss.
Judgment on riigikohus.ee (Estonian)