Insurance Broker Duties: From Risk Assessment to Coverage Placement

B. Merritt Excavation & Utilities Inc., a Calgary-based underground utilities contractor, retained Prairieview Insurance Brokers Ltd. in 2018 to secure comprehensive commercial liability insurance for its excavation and trenching operations. Broker Melissa Crane placed the policy with Broadfield Insurance Company but failed to disclose that it contained a Subsurface Operations Exclusion Endorsement, which effectively eliminated coverage for the company's core day-to-day work. In 2023, during a residential development project, a subcontractor struck an unmarked gas line, triggering an explosion that caused approximately $4,800,000 in damages to nearby homes and municipal infrastructure. When Merritt Excavation submitted a claim, Broadfield denied it based on the undisclosed exclusion. Having paid premiums for years on a policy that provided virtually no meaningful protection, Merritt Excavation commenced legal action against Prairieview, its brokers, and Broadfield, alleging broker negligence, breach of contract, and negligent misrepresentation.