A British Columbia court has dismissed a $29.8 million third-party claim against Marsh Canada, drawing a firm line on broker duties to unnamed insureds.
In Fibreco Export Inc. v. AG Growth International Inc., 2026 BCSC 956, Justice D.M. Masuhara of the Supreme Court of British Columbia granted summary judgment on May 27, 2026, throwing out a third-party negligence claim brought by AG Growth International Inc. (AGI) against insurance broker Marsh Canada Limited and senior broker Thomas Liu.
The dispute traces back to Fibreco Export's terminal expansion in North Vancouver, where 18 new agriproduct storage silos were built. Marsh placed a construction all-risk (CAR) policy for the project on March 8, 2018, with an estimated coverage value of $85 million. The policy was extended several times. The final extension ran to August 30, 2020 - the same day two silos deformed during commissioning. On September 11, 2020, the first silo loaded with full product collapsed, damaging an adjoining silo and related infrastructure. Lloyd's Underwriters, the CAR insurer, denied coverage on the basis that the policy had expired before the loss.
Fibreco sued AGI for $112.5 million for the silo defects and collapse. On July 27, 2023, AGI and Fibreco settled. AGI then turned to Marsh as a third party, seeking $29,847,630.68 - the portion of its settlement payment it said would have been covered by the CAR policy had the policy been in force.
AGI's theory was that as an unnamed insured under the CAR policy, it was owed a duty of care by the broker. AGI argued recognizing such a duty would be a modest extension of existing law on pure economic loss.
The court disagreed. Applying the proximity framework from Deloitte & Touche v. Livent Inc. and 1688782 Ontario Inc. v. Maple Leaf Foods Inc., Justice Masuhara found AGI failed to plead or prove the two controlling elements: an undertaking by Marsh to AGI, and corresponding detrimental reliance by AGI.
Marsh's evidence showed it had no communications with AGI, did not know AGI's role on the project, and was never provided with the supply agreement between Fibreco and AGI. AGI representatives admitted in discovery that they never asked Marsh about the policy, never received certificates of insurance from Marsh, and were unaware Marsh was Fibreco's broker before the collapse.
The court also accepted Marsh's argument that imposing such a duty would carry wide consequences. The project involved at least 179 entities. Marsh's expert opined the proposed duty would "radically change how builder's risk policies are placed by brokers."
Justice Masuhara also noted AGI had a clear contractual defence available - Fibreco's covenant in the supply agreement to procure and maintain the CAR policy - but chose not to pursue it and settled instead. The judge characterized AGI's settlement payment as a voluntary litigation choice.
Marsh's application for summary judgment was granted. AGI's third-party claim was dismissed.
