Why it matters for your company
Insurers generally work with one broker per account. If two brokers approach the same insurer for you, the insurer honors the first submission unless you sign a letter naming your chosen broker.
Companies change broker of record mid-term when a renewal goes badly or a contract needs an insurer the current broker cannot reach. The letter moves servicing and future renewals; the policy terms stay the same until they are changed.
Related terms
- Surplus linesThe market of non-admitted insurers that write risks the standard market will not, with freedom to set their own forms and rates. A specially licensed broker places the policy and handles the state taxes and filings.
- BinderA temporary written confirmation from the insurer that coverage is in force on agreed terms while the full policy is being issued. It is enforceable for the period it states.
- Loss runsReports from your current and past insurers listing every claim, its status and the amounts paid or reserved over recent policy years. Underwriters ask for them when quoting a renewal or a new policy.