What is the broker's duty regarding full disclosure?

The broker's duty regarding full disclosure is fundamentally centered around transparency and the necessity to provide the insurer with all material information, regardless of whether the insurer explicitly requests it. This obligation ensures that the insurer can adequately assess the risk associated with the policyholder and make informed underwriting decisions.

Material information refers to anything that could influence the insurer's decision on coverage terms or pricing. By disclosing all relevant details, the broker upholds ethical standards in the insurance industry and fosters a relationship built on trust between the client, the broker, and the insurer. This duty is critical for maintaining the integrity of the insurance process and protecting the interests of all parties involved.

In contrast, withholding information, only sharing positive details, or limiting disclosure to legal requirements could result in a lack of critical insights for the insurer, potentially leading to adverse outcomes such as claims disputes or coverage denials in the future. Thus, the broker’s responsibility encompasses a comprehensive approach to sharing all pertinent information to ensure a fair and responsible insurance practice.