Every answer and its explanation appears here once you have finished the path. Each one then links to the matching glossary entry, where the concept is set out in full with its worked example.
1. Information given to the broker and never passed on to the insurer. What does it produce?
It does not protect the insured against its insurer, since the broker is mandated by the insured: it opens a claim against the broker, which is not at all the same thing, the loss staying uncovered and a second action having to establish fault and harm
The mandate governs everything else: what the broker knows is deemed known by the insured, and what the insured tells it reaches the insurer only if it passes it on. That asymmetry alone justifies writing important disclosures rather than saying them. The answer treating it as disclosure to the insurer casts the broker as the insurer's agent, which it is not in this structure, and it is the commonest belief. The one calling it ineffective either way gives up a real claim: the information did not reach the insurer, it certainly reached the broker, and that second fact founds the claim.
Glossary entry →2. The broker's duty to advise goes beyond finding the best price. On what is it judged?
On what it gathered before placing: enquiring into real needs, which means knowing the countries sold to, the structure of the buyers, the terms granted and the financing arrangements; explaining what the contract does not cover, more important than explaining what it does; and flagging manifest mismatches
A broker placing a whole turnover policy on an exporter whose business runs mainly through documentary credits, without saying what that changes, has not done its job EVEN IF THE CONTRACT IS GOOD: that is what separates the duty to advise from the quality of the placement. The outcome answer is what the loss produces, and it is wrong both ways, since excellent advice can leave a loss uncovered that the insured accepted knowingly. The tender answer measures a real diligence that says nothing about what the insured understood.
Glossary entry →3. Worked case: a question asked orally in February about three restricted countries, an answer that the standard policy suits, a signed questionnaire not mentioning them, a 1.7 million default in October. Which ground is strongest, and why?
Failure to advise rather than failure to pass on: a precise question was asked about those countries and the broker answered that the standard policy suited, without flagging the exclusion that would empty the cover on thirty percent of the business, and that ground depends less on proving the relay
Two questions the file mixes must first be separated, because the order decides what can be hoped for: cover is settled, the clause is clear, the insurer relies on it rightly, and arguing that consumes the useful time. What remains is the relay, and the two grounds do not weigh the same. The answer keeping only the failure to pass on describes a real ground whose proof is the weak point, since the exporter holds only an oral exchange. The lesson costs 1.7 million and fits in one line: disclosures that touch the perimeter get written, and the list of what the contract does not cover is requested signed at placement.
Glossary entry →4. What is NOT the broker's fault, and why does blaming it waste time?
A capacity refusal on a saturated country, a rate the market imposes, an exclusion every carrier applies: these are the market's boundaries, and a broker explaining them is doing its job; the insured also keeps its own obligations, declaring accurately, meeting deadlines, holding its limits
The three other answers name precisely the recognizable forms of placement fault, and they share one feature: the fault lies in having let the insured REMAIN IGNORANT of something it needed to know, not in having negotiated badly. Knowing what is not a fault serves to keep a real file from being scattered over a grievance that will fail, and the allocation turns on what each party knew and had to say. The insured does not transfer its own obligations by entrusting its program to a professional, which is the other half of the same rule.
Glossary entry →5. A broker is most often paid by a commission based on the premium. What does that illuminate, and what should be done?
A structure and not an accusation: it creates a tension between the broker's interest and its principal's when it comes to reducing a program, which explains why the question is raised openly, why some large programs move to a fixed fee, and why advice to reduce a perimeter is worth more coming from someone it would not pay
Naming a structure rather than an intent allows practical consequences instead of suspicion: have the program reread by someone not paid on the premium once it becomes large, not out of distrust but because two readings of a thirty page contract beat one. The answer seeing nothing because the insurer deducts the commission forgets that the commission is included in the premium the insured pays. The one seeing an advantage confuses the size of the premium with the quality of the placement, which have no reason to move together.
Glossary entry →