In surplus lines transactions, brokers must make what clear to their clients?

In surplus lines transactions, it is crucial for brokers to clarify their role as brokers versus agents to their clients. This distinction helps clients understand that brokers represent the needs and interests of the insured when seeking coverage from non-admitted insurance markets. Brokers are typically tasked with accessing markets that are not available through standard insurance channels, which adds an essential layer of expertise and advocacy for the client.

By explaining their role, brokers can ensure that clients are aware of the unique aspects of surplus lines insurance, such as the potential unregulated nature of the products and the markets involved, as well as the broker's responsibilities in facilitating these transactions. This clarity fosters trust and supports informed decision-making by the client in seeking appropriate insurance coverage.

Understanding the specific roles of brokers and agents also aids clients in navigating the complexities of surplus lines insurance, as it delineates who is responsible for what aspects of the transaction.