Marine insurance broker’s duties and liabilities

Abstract

The conduct of Marine insurance broker is subject to the general principles of agency law. However, it is also affected by the traditional customs and contemporary market practices in the field of marine insurance. As a result, marine insurance broker’s duties and liabilities have unique features which are different or not that common for other general agents.

Firstly, marine insurance brokers have duties that will not be observed by other general agents who effect a contract on behalf of their principal. For example, marine insurance broker has a personal liability to pay the premium under the marine insurance contract he obtained for the assured. Secondly, marine insurance broker’s multiple roles in the course of its business frequently raise the issue of conflict of duty and interest. Thirdly, the broker’s way of placing a cover makes it hard to put the line between the broker’s service of providing information and the service of providing advice. This is crucial for assessing the broker’s liabilities when he fails to obtain the cover for the assured.

These exceptional features make marine insurance broker’s duties and liabilities a valuable topic for research. However, there is no scholarly monograph which specifically considers these matters. The thesis will examine whether the exceptional duties should be reformed to comply with the general law of contract and agency. If not, is there any reform that can be made to improve the clarity, certainty and fairness of these duties. The thesis will also identify the broker’s duties that are inclined to give rise to conflict of duty and interest and analyse how the issues are being treated by the court, and regulation authorities. Then the author will make recommendations on how to avoid the conflict of duties and interest. Finally, the thesis will discuss how the broker’s liabilities are being assessed and how the brokers can protect their own risks of extensive liability by inserting a limitation of liability clause in the retainer.

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