Company authorized by a managing agent to enter into contracts on behalf of a Lloyd's syndicate, within the limits of a binding authority and subject to market approval.
A syndicate based in London cannot itself underwrite a homeowners risk in California or a truck fleet in Brazil: it needs a local presence. The coverholder is that presence. It is an independent company, broker or agent, to which a managing agent delegates by contract the power to bind the syndicate, within a perimeter strictly defined by the binding authority: classes of risk, territories, limits per policy, rating, mandatory exclusions. The coverholder issues policies, collects premiums and, where the authority provides for it, settles claims below a threshold. Two safeguards distinguish this from plain outsourcing. Approval is granted by Lloyd's itself rather than by the syndicate alone, which creates a single register the whole market can consult. And the managing agent remains responsible for what its delegate writes, which imposes periodic audit and production monitoring. Delegation has thus become a channel of considerable volume, with several thousand approved coverholders worldwide.
A Lloyd's approved coverholder based in Florida can issue homeowners policies on behalf of three syndicates at once, within a per-risk insured value and a per-county accumulation set in the binding authority. The managing agent's annual audit then covers the compliance of issued policies with those limits, and breaching a county accumulation is the most frequently recorded failing, because it is invisible policy by policy.
coverholder, titulaire d'autorité de souscription, agréé du Lloyd's, délégataire agréé