A licensed agent owes a duty of care to clients. The duty is measured against the standard of a reasonably competent agent acting with the knowledge and skill expected of someone in the agent's position. This is an objective standard, not a subjective one: "I was trying my best" is not a defence if the agent's conduct fell below what a reasonably competent peer would have done.
The duty of care includes:
- Applying for products accurately and completely
- Explaining policy features, limitations, exclusions, and premium obligations
- Ensuring the client understands what they are buying, including what events are not covered
- Recommending riders or add-ons where they are genuinely suitable
- Following up when coverage is pending or requires additional information
Breach of the duty of care that causes the client a measurable loss is the foundation for a professional negligence claim and an errors and omissions (E&O) insurance claim. E&O coverage is therefore not optional: it is a required condition of licensing in every Canadian province.
Common mistake: confusing the duty of care with the duty of disclosure. The duty of care governs the overall quality of advice and service. Disclosure is one specific component of that broader duty.
Recall: Against what standard is an agent's duty of care measured? Name three specific acts or omissions that would breach the duty of care.