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Those who wish to buy commercial insurance generally approach brokers. A broker鈥檚 job is to assess the client鈥檚 needs and the type of insurance required, provide advice on the company best equipped to provide it, and approach the company.

In insurance companies, the person who decides whether to accept the risk and what premium to charge is called an underwriter. Sometimes the level of cover required is too large for a single insurer to accept the risk.

In such cases, many insurers contribute, each taking a part of the risk. There will generally be a lead insurer who may have accepted, say, 25% of the risk. Smaller 鈥減layers鈥� underwrite what are called 鈥渇ollow lines鈥� and may have accepted 10% or less. This is known as 鈥渟lip business鈥�.

For very large risks, there may be the layers that Taylor referred to. In these situations you may find a group of insurers 鈥� that is, a lead with a number of follow companies.

Unfortunately, with big projects and a demand for very high insurance limits, buyers must rely on the market sharing the risks 鈥� and this may give rise to differences in cover. But when an insurer reserves its position it usually means it wants time to think about things. It might believe the insured has breached a term of the policy and it wishes to investigate matters without accepting liability or giving an outright refusal. They may still end up paying.

Phil Grace, Norwich Union Insurance