Plaintiff-side lawyers are already talking about a sharp increase in broker negligence claims once Ontario’s 2026 auto insurance changes take effect – and brokers are firmly in their sights. That warning came from Dutton Brock LLP partner Chad Leddy during a recent QBE webinar on Ontario auto reform, where he and fellow partner and SABs expert Andrea Lim unpacked what the new regime will mean in practice.
Leddy said members of the plaintiffs’ bar have been openly discussing how they will adjust to a world where many injured clients have reduced access to statutory accident benefits (SABs). For at least “12 to 18 months,” he noted, plaintiff counsel have been signalling that they intend to “pursue more claims against brokers” when clients discover too late that key protections were optional and never added to their policies.
For years, brokers have been able to rely on Ontario’s standard auto policy to provide a relatively solid package of SABs. Even if clients declined some extras, there was still a built‑in foundation of income replacement, some caregiving and housekeeping support, and death and funeral benefits.
From July 1, 2026, that comfort largely disappears. Lim explained that several core benefits will be peeled out of the default SABs package and turned into optional coverages, with insurer‑determined amounts approved by FSRA. Income Replacement Benefits (IRBs), non‑earner benefits, caregiver benefits, various “other expenses” such as lost educational costs, visitor expenses and damage to clothing, glasses and hearing aids, along with death and funeral benefits, will no longer be automatic for every insured.
The legal test for caregiver and housekeeping or home maintenance benefits is also being altered. Instead of focusing on whether an insured is catastrophically impaired, the new language asks only whether the person has an “impairment.” Lim warned that this lower threshold “is going to open up a whole bunch of legal tests” as courts and tribunals wrestle with what that word should mean in this context.
The financial structure of benefits is also shifting. The familiar $400‑a‑week standard IRB cap and the $600, $800 and $1,000 optional tiers are being scrapped in favour of amounts “fixed by the optional benefit.” That freedom could lead some insurers to stick close to existing levels, while others experiment. As Lim put it, the market risks becoming a “possible Wild West scenario” if carriers compete with widely different options and price points.
For brokers, Leddy said, the comfortable defence that they sold “the standard” SABs package no longer exists. That baseline, he cautioned, is “now gone, the shield is off.”
Lim reminded the audience that, in Ontario, broker negligence is treated as professional negligence. Courts in decisions have made it clear that brokers owe a strong duty of care: they must ask questions, understand a client’s situation, anticipate foreseeable risks and provide genuine advice, not just take orders.
In a regime where key protections are optional and highly customizable, plaintiffs’ lawyers will find it easier to argue that brokers fell short of that duty if a client ends up underinsured after a serious accident. Leddy shared what he has been hearing informally from the other side of the bar: plaintiff counsel, he said, “will be pursuing more claims against brokers” as they look for additional pockets of recovery when SABs are thin.
Because many consumers will still chase the lowest premium, brokers will often be the last line of defence between a stripped‑down policy and a future lawsuit. Lim underscored that point with a very practical piece of advice: “it’s really incumbent on brokers now to…paper your file.” From first contact, brokers should be recording what was explained, what was recommended and what the client chose.
Lim and Leddy urged brokerages to invest in internal education, using FSRA’s toolkits and claim forms to ensure everyone understands the July 1, 2026 changes and can explain them plainly to clients. They also encouraged firms to standardise how conversations about optional benefits and higher liability limits are documented, whether through signed checklists, email summaries or detailed CRM notes.
Renewals will be especially important, because policies that were in force before the reforms can effectively roll into the new world with existing benefits deemed to continue unless the insurer and named insured agree in writing to change or decline them. Every renewal conversation therefore becomes a critical moment where coverage can be reduced – and where the broker’s advice and records may later be scrutinised.
