A broker discovers the client does not have sewer back up coverage, and that the location now qualifies for it. What should the broker do next?

A broker has a professional duty of care to their clients. Upon discovering a significant coverage gap, such as the lack of sewer backup protection for a now-eligible property, the broker must act promptly. The correct procedure is to immediately inform the client of the exposure and the availability of coverage. Providing a quote allows the client to make an informed decision. Waiting until renewal would be a breach of the broker's duty, as a loss could occur in the interim. Adding coverage without consent is not permissible.

A. Waiting until 30 days before renewal unnecessarily exposes the client to a potential uninsured loss. The broker's duty is to act promptly upon discovering an exposure.

B. A broker cannot bind or add coverage, which incurs a premium, without the express consent and instruction of the client.

D. Waiting 60 days before renewal is an even greater failure in the broker's duty of care than waiting 30 days.

1. Registered Insurance Brokers of Ontario (RIBO). (2022). RIBO Conduct and Ethics Handbook. Section: "Duty to Client," Principle 1: Competence and Quality of Service. This section emphasizes the broker's responsibility to advise clients on their insurance needs and coverage gaps in a timely manner.

2. Insurance Institute of Canada. (2019). C11: Principles and Practice of Insurance. Chapter 3: The Insurance Broker and Agent. The text outlines the broker's role as an advisor, which includes identifying risks and recommending appropriate coverage to clients without undue delay.