BROKERS. 
bargains between merchants and trades- 
men, in matters of money or merchandize 
for which they have a fee or premium. See 
Exchange. 
Brokers, insurance or policy, are agents 
who transact the business of insurance be- 
tween the merchant or party insured and 
the underwriters or insurers. These, in- 
surance brokers, from the nature of their 
employment, ought to be, and indeed ge- 
nerally are, persons of respectability and 
honour, in whom unlimited confidence may- 
be reposed. To the broker the merchant 
looks for the regularity pf the contract, 
and a proper selection of responsible un- 
derwriters: and to him also the under- 
writers look for a fair and candid disclosure 
of all material circumstances affecting the 
risk, and for the payment of their pre- 
miums. There is usually an open account 
between each broker and every under- 
writer 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 
underwriter 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 pay- 
ment, and that he alone, and not the un- 
derwriters, can recover the premiums from 
the insured. This point, however, has 
never been settled by any judicial determi- 
nation. But though the underwriter thus 
looks to the broker for his premium, and 
though the broker, in his account with the 
underwriter, takes credit for the losses and 
returns for premiums, which, he is autho- 
rised to receive from the underwriter, yet 
such losses are not to be regarded as a debt 
from the underwriter to the broker. Where 
the merchant happens to reside at a dis- 
tance from the place where he means to be 
insured, the policy is usually affected by 
the mediation of his agent or correspondent 
there, who, if he be not a broker, employs 
one, and gives him all necessary instruc- 
tions. In order to his being an agent in such 
acase,hemust either have express directions 
from the principal to cause the insurance 
to be made, or else - it must be a duty aris- 
ing from the nature of his correspondence 
with the principal. And no general autho- 
rity 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 par- 
ties interested. However, though one man 
cannot, in general, compel another against 
his consent to become an agent for procur- 
ing an insurance to be effected for him, 
there are three cases, in which an order to 
insure must be complied with: as, first, 
where an agent has effects of his principal 
in his hands ; secondly, where he has been 
in the practice of making insurances, and has 
given no notice to discontinue ; and, third- 
ly, 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 tire execution of it, it is the 
duty of each to conduct himself with the 
gieatest fidelity, punctuality, and circum- 
spection. For in this, as in all other cases, 
where a man, either by an ( express or im- 
plied undertaking, engages to do an act for 
another, and he either wholly neglects to 
do it, or does it improperly or unskilfully, 
an action on the ease w ill lie against him to 
lecovei 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 insurance to be made, but limits 
the broker to too small a premium, in con- 
sequence of w hich no insurance can be ef- 
fected, he is liable to make good the loss 
to bis correspondent; for though if is his 
duty to get the insurance done at as low a 
premium as possible, yet he has no right so 
to limit the premium, as to prevent the in- 
surance from being effected. And even a 
voluntary agent, who has no prospect of re- 
muneration for his trouble, is liable, pro- 
vided that he takes any step in the busi- 
ness. It is not only the duty of the agent, 
in transacting the business of insurances 
to conduct himself with fidelity and punc- 
tuality towards his employer, but he is also 
bound to observe the strictest veracity and 
candour towards the insurer : for any fraud 
or concealment on his part will make void 
the policy, even though the insured be alto- 
gether ignorant and innocent respecting it. 
In an action against an agent or broker, 
whether for negligence or unskilfulness in 
effecting an insurance, the plaintiff is enti- 
tled to recover to the same amount as he 
might have recovered against the under- 
writers, if the policy had been properly ef- 
fected. But he can only recover what, in 
point of law, he might have recovered on 
the policy; and not what the indulgence or 
liberality of the underwriters might proba- 
bly have induced them to pay. In such an 
action, the agent may avail himself of every 
defence, such as fraud, deviation, non-com- 
