When placing surplus lines coverage, what is the broker's primary responsibility to the client?

The primary responsibility of a surplus lines broker to their client is to ensure that the client fully understands the terms and conditions of the coverage being offered. This is crucial because surplus lines insurance often deals with unique or specialized risks that may not be adequately addressed by standard insurance policies. It is the broker's duty to effectively communicate the specifics of the coverage, including what is included and excluded, as well as any limitations that might apply.

Understanding these terms is essential for clients to make informed decisions about their insurance needs. By ensuring that clients grasp the nuances of their policy, brokers help protect their interests and facilitate a better alignment of coverage with their specific risk profiles. This understanding can also prevent potential disputes in the future regarding what the policy covers.

While obtaining the lowest possible premium, minimizing liability, and limiting coverage options are all considerations in the insurance process, they do not take precedence over the necessity of client understanding. A comprehensive grasp of the policy terms allows clients to navigate their insurance needs more effectively, thus making informed choices that align with their risk management strategies.