What is the broker’s overall role in claims?
To ensure the client receives a fair indemnity under the policy and is treated fairly throughout the claim.
If a broker arranged the policy, when do their claims responsibilities end?
They remain responsible for handling claims under that policy, even if the client has since moved, unless the TOBA/fee agreement says otherwise.
Why is it vital to keep good written records on claims?
Because people and firms change; without written records it is impossible to prove what happened or what was agreed.
What problem can arise with ‘legacy’ claims for brokers?
Long-tail claims may arise years later when staff have moved on and knowledge is only in the written file.
How have some brokers dealt with legacy claims workloads?
By creating specialist internal legacy claims teams or outsourcing legacy claims handling to specialist firms.
When working on a fee basis, when is a broker responsible for handling claims?
Only if the fee/service agreement clearly states that claims handling is included and for how long after termination.
What should a fee/service agreement say about claims after the broker is replaced?
Who is responsible for existing and future claims and whether the old broker will help, and on what terms.
Why can unclear service agreements cause claims disputes with clients?
Clients may expect claims help that the broker did not intend to provide, leading to complaints and E&O risk.
Why should brokers cooperate with new brokers on claims handover?
To give a smooth transition for the client and reduce E&O risk by ensuring the new broker understands the history.
What is the broker’s primary duty when negotiating claims?
To see that the insured is fairly indemnified according to the policy terms, not to reduce the insurer’s outlay.
Why must brokers understand post-loss conditions and warranties?
Because they fall outside the Insurance Act 2015 and breaching them can still jeopardise claims.
When should post-loss obligations be explained to the client?
At inception/renewal, before a loss occurs, so the client knows what to do after a loss.
Which ICOBS section mainly governs claims handling?
ICOBS 8.
Under ICOBS 8.3, what must brokers avoid in claims handling?
Placing themselves in a conflict of interest with the customer unless properly disclosed and managed.
If a broker is acting for the insurer on claims, what must they tell the customer?
That they are acting for the insurer and not for the customer in relation to that claim.
Can a broker act for both insurer and customer on the same claim?
Only if activities are separated and the conflict is properly disclosed and managed, but often it is inappropriate.
What must a broker do if they receive a claim but have no authority to handle it?
Pass the notification promptly to the insurer and tell the client they cannot deal with the claim.
What standard must a broker meet when handling claims for customers?
They must act with due skill, care and diligence in line with FCA Principles.
Why have insurers encouraged brokers to withdraw from routine liability claims handling?
Because of strict Civil Procedure Rules and Enterprise Act timelines; insurers want full control to avoid penalties for delay.
What did the Enterprise Act 2016 introduce regarding late payment?
A right to damages where an insurer unreasonably delays payment of a valid claim.
What are the two broad methods of dealing with claims?
Broker-handled claims and insurer-handled claims (with broker only involved as needed).
In which types of business are brokers often heavily involved in claims?
Commercial property, business interruption and complex liability claims.
In which types of business are claims often handled directly by insurers?
High-volume, standardised claims such as personal lines, motor and some employers’ liability.
What is ‘claims advocacy’?
When a broker supports and advises the client on a claim, especially if problems arise, without handling all routine claims.
