Utmost good faith

The role of brokers

In recent years the general rule that the broker is, in placing insurance or reinsurance, the agent of the potential policyholder, has come under increasing strain, given the dual functions that brokers typically exercise in the modern market. The starting point nevertheless remains that the broker acts for the assured in the absence of any obligations specifically undertaken by the broker in favour of insurers.The operation of the general rule means that information provided by the assured to his broker is not deemed to have been received by the insurers, as the assured is in effect making disclosure to himself. That principle was applied by the Court of Appeal in Hazel (t/a KGM Motor Policies at Lloyd's) v Whitlam [2004] EWCA Civ 1600.