BROKERS. 



kers, simply so called, who sell house- 

 hold furniture and second-hand apparel. 



BROKERS, exchange, are a sort of nego- 

 tiators, who contrive, make, and conclude 

 bargains between merchants and trades- 

 men, in matters of money or merchan- 

 dize, for which they have a fee or premi- 

 um. See EXCHANGE. 



BROKERS, insurance or policy, are agents 

 who transact the business of insurance, 

 between the merchant or party insured 

 and the underwriters or insurers. These 

 insurance brokers, from the nature of 

 their employment, ought to be, and in- 

 deed generally are, persons of respecta- 

 bility and honour, in whom unlimited 

 confidence may be reposed. To the 

 broker the merchant looks for the regu- 

 larity of the contract, and a proper selec- 

 tion of responsible underwriters : and to 

 him also the underwriters look for a fair 

 and candid disclosure of all material cir- 

 cumstances affecting the risk, and for 

 the payment of their premiums. There 

 is usually an open account between each 

 broker and every underwriter with whom 

 he has much dealing. In this account 

 the broker makes himself debtor to the 

 underwriter for all premiums, and takes 

 credit for all losses to which the under- 

 writer is liable, and which the broker is 

 authorised to receive. Indeed, it is ge- 

 nerally understood, that by the usage of 

 trade in London, the underwriters give 

 credit only to the broker for their pre- 

 miums, and can resort only to him for 

 payment, and that he alone, and not the 

 underwriters, can recover the premiums 

 from the insured. This point, however, 

 has never been settled by any judicial 

 determination. But though the under- 

 writer thus looks to the broker for his 

 premium, and though the broker, in his 

 account with the underwriter, takes cre- 

 dit for the losses and returns for premi- 

 ums, which he is authorised to receive 

 from the underwriter, yet such losses are 

 not to be regarded as a debt from the un- 

 derwriter to the broker. Where the 

 merchant happens to reside at a distance 

 from the place where he means to be in- 

 sured, the policy is usually effected by 

 the mediation of his agent or corres- 

 pondent there, who, if he be not a bro- 

 ker, employs one, and gives him all ne- 

 cessary instructions. In order to his be- 

 ing an agent in such a case, he must 

 either have express directions from the 

 principal to cause the insurance to be 

 made, or else it must be a duty arising 

 from the nature of his correspondence 

 with the principal. And no general au- 

 thority which he may have, in relation to 



a ship or goods, will make him an agent 

 for the purpose of insuring, on behalf of 

 the parties interested. However, though 

 one man cannot, in general, compel ano- 

 ther against his consent to become an 

 agent for procuring an insurance to be 

 effected for him, there are three cases in 

 which an order to insure must be com- 

 plied with : as, first, where an agent has 

 effects of his principal in his hands; se- 

 condly, where he has been in the prac- 

 tice of making insurances, and has given 

 no notice to discontinue ; and, thirdly, 

 where he accepts bills of lading sent him 

 on condition to insure. To the office of 

 agent or broker, great responsibility at- 

 taches ; and, in the execution of it, it is 

 the duty of each to conduct himself with 

 the greatest fidelity, punctuality, and cir- 

 cumspection. For in this, as in all other 

 cases, where a man, either by an express 

 or implied undertaking, engagesto do an 

 act for another, and he either wholly ne- 

 glects to do it, or does it improperly or 

 unskilfully, an action on the case will lie 

 against him, to recover a satisfaction for 

 the loss or damage resulting from his 

 negligence or want of skill. Hence, if a 

 merchant here accept an order from his 

 correspondent abroad to cause an insur- 

 ance to be made, but limits the broker to 

 too small a premium, in consequence of 

 which no insurance can be effected, he 

 is liable to make good the loss to his cor- 

 respondent ; for though it is his duty to 

 get the insurance done at as low a pre- 

 mium as possible, yet he has no right so 

 to limit the premium, as to prevent the 

 insurance from being effected. And even 

 a voluntary agent, who has no prospect 

 of remuneration for his trouble, is liable, 

 provided that he takes any step in the 

 business. It is not only the duty of the 

 agent, in transacting the business of in- 

 surances, to conduct himself with fideli- 

 ty and punctuality towards his employer, 

 but he is also bound to observe the strict- 

 est veracity and candour towards the in- 

 surer .- for any fraud or concealment on 

 his part will make void the policy, even 

 though the insured be altogether igno- 

 rant and innocent respecting it. In an 

 action against an agent or broker, whe- 

 ther for negligence or unskilfulness in 

 effecting an insurance, the plaintiff is en- 

 titled to recover to the same amount as 

 he might have recovered against the un- 

 derwriters, if the policy had been pro- 

 perly effected. But he can only recover 

 what, in point of Jaw, he might have re- 

 covered on the policy; and not what the 

 indulgence or liberality of the under- 

 writers might probably have induced 



