The London insurance market is replete with history, personality, and peculiarity. One peculiarity that often affects insurance coverage disputes for policyholders in the United States arises from the role of insurance brokers in London.
These brokers act as gatekeepers: Policyholders must use them to obtain policies from the London Market. Often, they have been viewed as agents of the policyholders that are seeking to purchase insurance coverage, rather than as agents of the insurance companies. That position typically is proffered by the insurance companies that participate in the London market, along with syndicates of Lloyd’s of London.
Yet recently, the London insurance companies and syndicates have reversed course—even within the same case—and contended that they themselves are the ones whom the London brokers represent. They have argued in favor of dual agency—i.e., that it is necessary to examine the particular action the London broker is taking in order to decide whom the broker represents at that time.
The outcome of a coverage dispute can rest on the resolution of this question. It has implications for discovery, attorney-client privilege, notice, and other potentially case-dispositive concerns.