What might be a broker's responsibility when dealing with surplus lines?

A broker's responsibility when dealing with surplus lines includes educating clients about potential risks and exclusions. This role is crucial because surplus lines insurance often covers unique or high-risk scenarios that may not be available through standard insurance markets. Brokers must ensure that clients understand these specific risks, including any exclusions or limitations in coverage that could affect their insurance protection. Proper education empowers clients to make informed decisions about their coverage options and understand the nuances of the policies they are purchasing.

The responsibilities of a broker are fundamentally centered on providing guidance and support to clients. Simply making binding coverage decisions without client input undermines the client-broker relationship and could lead to unfavorable outcomes for the client. Similarly, reducing premiums without consulting the insurer would not only be unethical but could also violate regulatory requirements. Finally, selling a policy without client advisement neglects the broker's duty to act in the best interest of the client, potentially leaving them unprepared for their specific risks.