Binding Authorities Professional Liability

Binding Authorities

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Binding Authority and Cover-Holders

A Binding Authority is an agreement whereby an Insurer delegates underwriting authority to another party known as the Cover-holder (an insurance broker or underwriting agent that will act in place of the insurance provider).

 

Looking to become a BA / Cover-Holder? – Servca’s Specialist BA Scheme

As specialists within the insurance sector, we work with a large number of well established insurers based in both the Canadian and UK market. We are also an experienced brokerage, backed by Lloyd’s of London, providing us with direct access to the largest insurance market in the world and all their syndicates – The Lloyd’s Insurance Market.

We are able to provide Binding Authority and Cover-holding programs for Insurance Brokers based within Canada and the UK. Our BA programs are globally arranged by Servca, often using the Lloyd’s of London market as a capacity.

By choosing us as you Binding Authority Program provider, we provide you access with the highest ranked Insurance providers in both policy quality but security

 

Already a BA / Cover-Holder? – Why you should consider InsurancE

As a cover-holder, the scope of your formal duties has widened. Now you may be obligated to provide information, access documentations and records that go beyond market practice or agency principles. As a cover-holder you may also be delegated down over duties arranged as per the insurance provider you are a cover holder of.

With this there are also various exposures that you are now open and liable to. While being a binder can be profitable, it also comes with unseen risks that can generate claims in the future against the cover-holder providing the service.

 

Examples of Scenarios that can Lead to Claims Made Against the Cover-Holder

  • Business that was bound was of a perceived lower quality than if placed within the open market.
  • Risks were written outside the scope of authority delegated to the cover-holder. Therefor an unlawful delegation of underwriting authority has occurred.
  • Commissions or Deductions were excessive.
  • Broker / Cover-holder was placed within a position of legal conflict, by reason of the different duties delegated by their policyholders and underwriters.
  • There was a conflict of interest between the cover-holder and insurance provider delegating their cover.

In the event there is a problem between the cover-holder and piece of business that has been written, the cover-holder can find themselves open to various exposures, all ending with damaging claim. By covering your assets, you can not only protect yourself against hefty financial sums but also from reputation damage that may stop you from keeping your authority as a cover-holder in the future.

Whether you are looking to become a Binding Authority, require BA services, or protect yourself from the worrying exposures that come with being a Binding Authority / Cover-Holder, Servca can provide you with quality services designed to benefit your needs.

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