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Insurance Broker Disclosure

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INSURANCE BROKER DISCLOSURE

Applicant / Insured Information

Broker Identification

Nature of Broker Relationship and Agency

The broker identified above acts as an insurance producer and is licensed to transact insurance. The broker's role is limited to placing insurance on behalf of the applicant or placing insurance with insurers as an intermediary. The undersigned acknowledges and confirms the broker's relationship by selecting one of the following:

Broker acts as agent of the Applicant/Insured and owes duties to the Applicant/Insured.

Broker acts as agent of the Insurer(s) for placement and may be authorized to bind coverage on behalf of insurer(s).

Broker may act in a dual capacity (representing both Applicant/Insured and certain insurer(s)) where permitted by law and where disclosed herein.

Compensation and Sources of Payment

The broker may receive compensation from multiple sources for placing insurance. Compensation may include commissions paid by insurer(s), policy fees paid by the applicant, contingent commissions, or other forms of remuneration. The broker certifies the following disclosed compensation arrangements:

Broker may charge other fees to the Applicant/Insured in addition to commission.

Conflicts of Interest / Affiliations

The broker is required to disclose known conflicts of interest or material relationships with insurers or other parties that may influence recommendations. Please indicate any applicable disclosures:

No known conflicts of interest or material affiliations to disclose.

Broker or firm has an ownership, affiliate, or referral arrangement with an insurer or service provider.

Policy Details / Coverage Considerations

Property

Liability

Auto

Life

Health

Other:

Beneficiary Designation (if applicable)

Complete beneficiary information for policies requiring beneficiary designation. If more space is required, attach a signed schedule.

Authorization and Release

By signing below, the Applicant/Insured authorizes the broker to obtain quotes, submit applications, request loss runs, underwriting and claims information from prior insurers, and to share applicant information with prospective insurers, premium financing sources, and other service providers as needed to place coverage.

I authorize the broker to obtain quotes and to request underwriting information on my behalf.

I authorize the broker to share necessary information with insurers and service providers to secure coverage.

I authorize release of claim history, credit information, or medical information where required by the insurer as a condition of coverage.

Acknowledgment and Certification

The Applicant/Insured acknowledges receipt of this Insurance Broker Disclosure and certifies that the information provided on this form and in related application materials is true and correct to the best of the Applicant/Insured's knowledge. The Applicant/Insured further acknowledges that the broker has disclosed the nature of the broker relationship, sources of compensation, and any known conflicts of interest as indicated above. The Applicant/Insured understands that coverage terms, limits, and exclusions are determined by the insurer and that the broker does not warrant coverage or insurer performance.

The Applicant/Insured agrees to notify the broker promptly of any material changes in risk or facts that could affect coverage, and acknowledges that failure to provide accurate information may result in denial of claims or rescission of coverage by insurers. The Applicant/Insured consents to broker compensation as disclosed above and authorizes the broker to proceed in placing insurance consistent with this disclosure.

Applicant/Insured Signature below attests that the Applicant/Insured has read and understands this disclosure and authorizations.

Applicant Name:

Signature:

Date:

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What the Insurance Broker Disclosure Is and When It Applies

An Insurance Broker Disclosure is a written statement provided by an insurance broker to a prospective client that explains the broker's role, relationships with insurers, sources of compensation, and any potential conflicts of interest. It clarifies whether the broker acts as a buyer's broker, seller's agent, or a dual agent, and often lists license details and regulatory information required by state insurance departments. The disclosure helps consumers make informed decisions about representation, compensation arrangements, and how claims or policy changes will be handled.

Why a Clear Disclosure Matters for Clients and Brokers

A transparent disclosure builds trust, reduces regulatory risk, and documents the broker's duties and compensation structure for the record. It creates a clear baseline for client expectations while protecting the broker by memorializing consents and acknowledgements.

Why a Clear Disclosure Matters for Clients and Brokers

Who Typically Prepares and Receives This Disclosure

Use the disclosure at first substantive contact, prior to policy placement, and whenever a material relationship or compensation change occurs.

  • Independent brokers advising retail clients about multiple carriers and product options.
  • Commercial brokers handling employer-sponsored benefits, risk placement, or large-property policies.
  • Insurance company agents when explaining appointment status, compensation, or limited agency relationships.

Core Elements to Include in a Professional Disclosure

A complete Insurance Broker Disclosure lists identity, licensing, compensation, agency relationships, conflicts, and complaint channels so clients can evaluate representation and make informed choices.

Broker Identity

Full legal name, business address, and principal office for the broker or brokerage.

License Details

State insurance license number(s) and issuing state(s) where the broker is authorized to transact business.

Agency Role

Clear statement whether the broker is acting as agent for the insured, agent for insurer, or intermediary.

Compensation

Description of commissions, fees, contingency payments, or third-party payments tied to placement.

Conflicts of Interest

Disclosure of any ownership, referral arrangements, or relationships that affect recommendations.

Regulatory Rights

State DOI complaint process and any consumer rights regarding privacy and dispute resolution.

Required Data Fields Commonly Included

Broker Name: Full legal business name
License Number: State-issued license number
Client Name: Full legal client name
Policy Details: Policy number or quote reference
Compensation Type: Commission, fee, or split
Contact Info: Address, phone, email

Step-by-Step: Completing and Delivering the Disclosure

Follow these sequential steps to prepare, review, and deliver the Insurance Broker Disclosure so it is clear, auditable, and legally defensible.

  • 01
    Prepare Document: Populate broker and client fields, attach policy reference.
  • 02
    Add Compensation Detail: State commissions and fees clearly and numerically.
  • 03
    Review for Accuracy: Confirm license numbers and contact information.
  • 04
    Deliver & Record: Provide signed copy to client and retain an audit record.

Configuring an Online Disclosure Workflow

Set up an electronic workflow to automate delivery, signature capture, and record retention for disclosures.

Field Configuration
Signer Order Sequential or parallel routing
Authentication Email + SMS OTP or KBA
Required Fields Make license and compensation fields mandatory
Retention Enable PDF export and audit trail

Where to Send, File, or Store the Completed Disclosure

Know the proper recipients and storage locations to maintain compliance and support future audits or claims.

  • Deliver to Client: Send signed copy to the client via secure email or eSignature platform.
  • File with Broker Records: Store the executed disclosure in the broker's compliance folder.
  • Provide to Insurer: Include disclosure with submission materials if requested by carrier.
  • Regulatory Submission: Retain records for inspections; submit only on regulator request.

Digital Signing and Technical Requirements

Ensure the platform supports ESIGN/UETA compliance, audit trails, and retention capabilities that match your recordkeeping policies.

  • Document Formats: PDF, DOCX supported
  • Authentication Options: Email OTP, SMS, KBA, or SSO
  • Integrations: CRM and cloud storage links

eSignature Pricing and Feature Comparison

Comparison of typical starting prices and core capabilities among common eSignature vendors; signNow appears first per vendor ordering rules.

signNow DocuSign Adobe Sign PandaDoc HelloSign
Starting Price $8/user/mo $15/user/mo $14/user/mo $19/user/mo $15/user/mo
Free Trial 7-day free trial No free trial No free trial Trial available Trial available
Bulk Send Yes (premium) Yes Yes Yes No
Audit Trail Yes Yes Yes Yes Yes
HIPAA Compliant Yes (BAA) Yes Yes No No

Common Mistakes to Avoid When Preparing Disclosures

  • Failing to state compensation in dollar or percentage terms, which can lead to confusion and regulator scrutiny.
  • Using inconsistent broker names or license numbers across documents, causing verification failures and delays in claims processing.
  • Delivering disclosures after policy placement rather than before, which may violate consumer-protection rules in some jurisdictions.
  • Omitting required state DOI language or complaint contact information, increasing the risk of administrative penalties.

Potential Consequences of Incorrect or Missing Disclosures

Regulatory Fines: Monetary penalties possible
License Action: Suspension or revocation risk
Contract Disputes: Rescission or indemnity claims
Reputational Harm: Loss of client trust
Claim Delays: Processing interruptions
Civil Liability: Potential damages exposure

Timing Considerations and When to Deliver the Disclosure

Deliver disclosures early enough to allow informed consent and to comply with any state-mandated timing rules before policy purchase or placement.

At First Contact:

Provide disclosure at the first substantive discussion about coverage or pricing

Before Placement:

Ensure client receives disclosure before binding coverage where state rules require pre-placement notice

Upon Material Change:

Issue an updated disclosure if compensation or relationships change materially

Retention Start:

Retain the executed disclosure from the date of signature

Audit Availability:

Make records available for DOI inspection within required response periods

Tips for Accurate, Efficient Disclosures

Follow these best practices to reduce errors, speed processing, and maintain defensible records.

Use Clear Numeric Language
Spell out commission percentages and any fee caps in numerals and words to avoid ambiguity. Include examples when variable compensation applies.
Template and Version Control
Maintain a single approved disclosure template per jurisdiction with versioning and change logs to ensure regulatory consistency.
Automate with eSignature
Use an eSignature platform with audit trails and required-field enforcement to reduce missing data and capture consent evidence.
Train Staff Regularly
Provide periodic training on disclosure timing, required language, and changes in state DOI rules to reduce compliance risk.

Real-World Examples of Disclosure Use

These short case summaries show how disclosures function across common insurance workflows.

Small Business Benefits

A broker presents a benefits package to an employer, discloses a fee-based sourcing arrangement

  • The employer confirms understanding in writing
  • The signed disclosure is stored with the proposal and used in later audits to verify compensation transparency and client consent.

Personal Lines Placement

An independent broker provides multiple homeowners quotes and lists commission splits per carrier

  • The client initials the compensation section
  • The broker retains the executed disclosure with the application to document recommendations and avoid future disputes.

FAQs and Troubleshooting for Broker Disclosures

Answers to frequent questions about validity, timing, and electronic handling of Insurance Broker Disclosures.


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