A recent determination by the FAIS Ombud ruled that the broker be held accountable for the loss incurred by the client, following a mistake by the product provider which the broker failed to pick up.
Details of the case were discussed in an article published on 27 November titled: A Costly Oversight.
Discovery Insure subsequently issued a media release on the matter:
In April 2013, Gen-Assist placed a personal lines insurance policy with Discovery Insure that unfortunately in error understated the client’s sum insured based on a quote incorrectly completed on Gen-Assist’s behalf by a Discovery Insure distribution support channel.
It was only when the client submitted a claim that the mistake was discovered.
At the time of loss, average was applied in accordance with the contract due to underinsurance, which was upheld by the Short-Term Insurance Ombudsman.
Gen-Assist and Discovery Insure respect the view taken by the FAIS Ombud and recognise that both parties were responsible for ensuring the accuracy of the quote and policy.
Arrangements have been made to ensure that the shortfall (R124 960) is to be borne by both Discovery Insure and Gen-Assist.