Is a surplus lines broker allowed to represent both the insured and the insurer in transactions?

The surplus lines broker is primarily tasked with representing the interests of the insured. This reflects the fundamental duty brokers hold to their clients, ensuring they advocate for the insured's best interests throughout the insurance process. In the context of surplus lines, where insurance is often placed with non-admitted carriers, the broker is expected to find coverage options that best serve the client’s unique needs and circumstances.

This duty of loyalty means that while the broker may work with various insurers, their primary obligation is to the insured, and they cannot simultaneously act in a way that represents the insurer’s interests or creates a conflict of interest. This ensures transparency and trust in the insurance transaction, as the insured must rely on the broker's guidance to navigate complex insurance needs.

The other options suggest scenarios that misinterpret the broker's role, such as being able to represent both parties or only the insurer, which would contradict the foundational principle of the broker's duty to the client. Additionally, the notion of representing both parties in certain situations could lead to conflicting interests, which the surplus lines broker must avoid. Therefore, the correct understanding of the broker's responsibilities hinges on their obligation to prioritize the insured's needs above all.