Thieves stole a 140-kilogram safe from Paul and Judy Bronfman’s mansion in November of 2008 – and over the ensuing five years one of Canada’s wealthiest couples have waged a court battle with their insurance broker over the fine print in the policy.
And now, that fight is headed for Ontario’s highest court.
“Brokers usually remind their clients that any changes, even small ones, may have an impact on the coverage they have for their homes,” says Steve Masnyk, of the Insurance Brokers Association of Canada. “It’s crucial for consumers of home policies to let their broker know of any purchases of significance, because these may or may not be covered in their existing policies.”
The Bronfmans’ insurance policy had limits of $10,000 for jewellery and $1,500 for cash, leaving them out-of-pocket for almost all of their missing valuables. What is at the heart of the years-long dispute is the question of just how far an insurance broker must go to ensure a client’s policies are adequate.
Of greater interest to brokers, the court will decide whether a form letter outlining a customer’s coverage limits is enough to get a broker off the hook.
The Bronfmans sued their insurance broker, BFL Canada Risk and Insurance Inc., for $3-million, alleging the broker was negligent for failing to ensure that the couple’s policy reflected their standard of living.
BFL has alleged the Bronfmans were well aware of the coverage limits in their policy, which was with AIG
After a lengthy trial last November, an Ontario Superior Court Justice Elizabeth Stewart ruled that BFL was negligent in failing to review how many valuables the Bronfmans kept in their home and for failing to advise them to upgrade their coverage. (continued.)
The judge rejected BFL’s arguments that the limits were spelled out in form letters sent to Mr. Bronfman. In her ruling, she concludes that the couple would have upgraded the policy to cover their jewellery had they known that it did not.
BFL is now challenging that decision before the Ontario Court of Appeal, arguing that the judge relied on “common sense” and not “objective evidence,” and that she “failed to consider the uncontroverted evidence that Mr. Bronfman knew he was underinsured.”
BFL, represented by lawyer Deborah Berlach of Stieber Berlach LLP, also says the judge was wrong in “distinguishing jurisprudence based on personal wealth,” when she dismissed a previous insurance case that held that a form letter outlining coverage limits was adequate notice and cited the Bronfmans’ wealth as a factor.
The notice of appeal says the judge was wrong in “dictating that legal principles... do not apply to those individuals of significant wealth.”
Ensuring policies are up-to-date and ensuring they reflect the true value of items is a challenge faced by the insurance industry, one that brokers must always remain vigilant.
“Peoples’ lives change over time,” says Masnyk, “and so should their insurance policies to reflect those changes.”
According to court documents, the thieves made off with $50,000 in cash – but that wasn’t the worst of it.
The stolen Stanley Cup rings were worth $15,000 each, and a platinum necklet with 95 diamonds has been valued at more than $100,000.
A pair of 18-karat-gold, diamond-mounted earring jackets have been estimated at more than half a million dollars. (continued.)
The thieves have never been caught.
In addition to BFL Canada’s appeal, the Bronfmans have launched a cross-appeal: demanding additional compensation for 80 pieces of jewellery on which the judge had said the couple should not recoup their losses because they would not have insured jewellery worth less than $20,000.
Neither side would provide comment about the case because it is before the courts.