What is one key differentiator between a Coverholder and a Lloyd's broker?

A key differentiator between a Coverholder and a Lloyd's broker is that Coverholders are authorized to underwrite risks on behalf of Lloyd's syndicates. This means Coverholders have the authority to accept or reject insurance applications, set premiums, and issue policies directly to clients. They operate under a binding authority granted by the syndicate, which allows them to make decisions in the underwriting process.

In contrast, Lloyd's brokers act as intermediaries between clients seeking coverage and Lloyd's syndicates. They do not have the authority to underwrite risks themselves; rather, they facilitate the placement of insurance by presenting risks to syndicates, negotiating terms, and ensuring that clients receive appropriate coverage. Lloyd's brokers provide expertise and act on behalf of clients, navigating the Lloyd's market without directly underwrite any risks.

This distinction is fundamental to understanding the roles within the Lloyd's insurance market, with Coverholders having an active role in risk acceptance while Lloyd's brokers serve as connectors between clients and Lloyd's insurers.