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Insurance brokers who hold themselves out as having professional expertise to assist in arranging contracts of insurance, must be registered.  They will, except in limited circumstances, always act as the agent of the insured or the intending insured.  Thus they will be professionally liable for any loss or damage suffered by a client where it is associated with their negligence in arranging or failing to arrange insurance.

Where a broker arranges insurance on an insured’s behalf, the broker or other intermediary must inform them of the name of the insurer involved.  If an insurance broker, agent or other intermediary receives money from the insured by way of a premium and then defaults, the insurer must make up the loss.  In the same way, money paid by an insurer to any person or organisation which is intended to be paid to the insured, will continue to be the responsibility of the insurer if that organisation or person defaults.

It is important that the insured should read, and check the accuracy of, everything that the intermediary writes on their behalf, particularly if they are asked to sign it.  If something is written down incorrectly, trouble is likely to result, and it may be that the policy will not be worth the paper it is written on.  In short, always read the document before signing it, and do not sign it if it is in any way inaccurate.

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