The functions and duties of insurance brokers—policy placement
The functions and duties of insurance brokers—policy placement

The following Insurance & Reinsurance practice note provides comprehensive and up to date legal information covering:

  • The functions and duties of insurance brokers—policy placement
  • Functions of insurance brokers
  • Insurance brokers’ duties in relation to insurance policy placement
  • Brokers’ duties in relation to policy documentation
  • Duties of producing brokers, placing brokers and sub-brokers
  • Insurance brokers’ duties in relation to insurance policy renewal

This Practice Note provides a high level introduction to the functions and duties of insurance brokers and explains the roles of insurance brokers and their duties in relation to the placement of insurance policies. It also provides practical guidance as to how brokers can prevent or mitigate negligence claims against them and provides links to more specific related content.

For information and guidance on the regulation of insurance distribution, see Practice Notes: FCA Handbook—introduction for the insurance and reinsurance sector, Insurance conduct regulation—COBS and ICOBS, PRA Rulebook—introduction for the insurance and reinsurance sector, Insurance Distribution Directive (IDD)—essentials and Effecting and carrying out contracts of insurance.

Functions of insurance brokers

The primary function of insurance brokers is to obtain agreement and understanding between insured and insurers in order to effect (or ‘place’) appropriate insurance cover pursuant to the instructions of its client.

This primary function is carried out as an agent of the insured but brokers also carry out various other tasks. Whether the broker is agent of the insured or insurer depends on the nature of the task. Brokers may also assume responsibility to underwriters under delegated authority arrangements, such as administering a binding authority or lineslip. In doing so, however, the broker will be acting as an agent of the insurer. For guidance as to the distinction between an insurance agent and an insurance broker, see Practice

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