What is the difference between a Letter of Appointment and a Letter of Authority?
Letter of Appointment vs Letter of Authority
There is always some confusion between a letter of authority and a letter of appointment, although they are very different.
Letter of Authority
A letter of authority gives permission for the insurance broker to collect information from insurers on behalf of their clients who currently work with another broker. An insurer will need this to release the requested policy information.
Berkley Insurance Australia’s (BIA) stance on a letter of authority may be slightly different to other insurers.
We will not acknowledge or produce the required information to an insurance broker who may send a ‘letter of authority’ who is not the placing broker via BIA.
Letter of Appointment
A letter of appointment is when the insured appoints the broker as their sole insurance broker and gives permission for the insurance broker to act on their behalf in obtaining insurance. This includes future renewals and any fees or commissions for their services.
For further clarification, NIBA has outlined specific information about these letters.
Related Links
Quote and Bind a Policy Instantly
Presenting a Risk to an Underwriter
Understanding Professional Indemnity Insurance: The Average Provision
Important Notice
Berkley Insurance Company (limited company incorporated in Delaware, USA) ABN 53 126 559 706 t/as Berkley Insurance Australia is an APRA authorised general insurer. Information provided is general only, intended for brokers and has been prepared without taking into account any person’s particular objectives, financial situation or needs. Insurance cover is subject to terms, conditions, limits, and exclusions. When making a decision to buy or continue to hold a financial product, you should review the relevant Policy Wording.
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