--- title: The Importance of Reasonable BOR Guidelines description: Learn about the importance of reasonable Broker of Record (BOR) guidelines in the insurance industry. Understand the impact of BOR changes and how they affect applicants, insureds, retail agents, and underwriters. image: https://www.ethosinsurance.com/hubfs/Red%20Ring%20Binder%20with%20Inscription%20Guidelines%20on%20Background%20of%20Working%20Table%20with%20Office%20Supplies%2c%20Laptop%2c%20Reports.%20Toned%20Illustration.%20Business%20Concept%20on%20Blurred%20Background..jpeg --- [Skip to main content](https://www.ethosinsurance.com/blog/importance-of-reasonable-bor-guidelines#maincontent) [«  View All Posts](https://www.ethosinsurance.com/blog) [ commentary ](https://www.ethosinsurance.com/blog/topic/commentary) # The Importance of Reasonable BOR Guidelines July 29th, 2024 | 5 min. read By [David Huss](https://www.ethosinsurance.com/blog/author/david-huss) ![](https://www.ethosinsurance.com/hubfs/Red%20Ring%20Binder%20with%20Inscription%20Guidelines%20on%20Background%20of%20Working%20Table%20with%20Office%20Supplies%2c%20Laptop%2c%20Reports.%20Toned%20Illustration.%20Business%20Concept%20on%20Blurred%20Background..jpeg) I’ve been a wholesale broker for over 20 years, and I don’t believe I’ve ever met anyone on the brokerage side who felt other than negatively overall about broker of record (BOR) changes – I suspect because in the aggregate most of them lose more business to BOR’s than they gain. Underwriters certainly don’t like BOR’s either for various reasons. Even applicants/insureds, who are supposed to benefit from a BOR change, don’t seem to like the process!   And yet the BOR process is a critical check-and-balance that exists to ensure that the customer, either the applicant/insured or the retail agent, ultimately gets what they feel they paid for ([yes, retail agents do pay for their wholesale broker!](https://www.ethosinsurance.com/blog/5-ways-retailers-pay-for-their-wholesale-insurance-broker)). For this reason, it is critical that carrier BOR guidelines don’t impose unreasonable restrictions. ## Two Types of BORs ![bor](https://www.ethosinsurance.com/hs-fs/hubfs/bor.png?width=600&height=429&name=bor.png) There are two types of BOR’s. The first is when the applicant/insured decides to work with another retail agent. The term agent of record change, or AOR, is often used to refer to this kind of situation. For E&S placements this typically includes a change in wholesaler broker as well, as most retail agents already have established relationships with one or more wholesale brokers they prefer to work with.     The second form of broker of record change is when a retail agent that controls the relationship with a particular applicant/insured decides to place the business through a wholesaler broker other than the one initially used for the current or previous placement. This can happen for many reasons, including the retail agent’s desire to work with a wholesaler broker that has a greater level of expertise in the class of business or line of coverage, or perhaps simply out of a desire to be provided a higher level of service.   ## E&S Carrier BOR Restrictions ![restricted access](https://www.ethosinsurance.com/hs-fs/hubfs/restricted%20access.png?width=600&height=399&name=restricted%20access.png) On the E&S side, different carriers impose different restrictions on BOR’s. No E&S carriers with HPL programs allow unrestricted BOR’s that I know of. Many E&S carriers allow for mid-term broker changes, but few will allow mid-term changes to take place without the new retail agent/wholesale broker taking some financial risk. Specifically, the new retail agent/wholesale broker is often responsible for return commissions associated with mid-term policy changes that reduce the annual premium (including policy cancelation), even though they received none of the commission from the initial placement. Many other E&S carriers accept BOR’s only for an upcoming placement – either new or renewal – and within a certain period of time prior to the upcoming effective date. In other words, they will not allow mid-term broker changes. Once placed, the insured is stuck with the incumbent retail agent until policy renewal. Finally, in one extreme case that I know of, the carrier disallows BOR’s altogether, meaning once a retail agent or wholesale broker places a piece of business with this carrier, they are the retail agent/ wholesale broker of record for that insured for all time. This carrier will allow the business to be placed elsewhere rather than recognize another retail agent or wholesale broker as the placing agent/broker.   ## Reasonable Restrictions Are Appropriate ![Warning sign by trail in state park RESTRICTED AREA . . . VIOLATORS SUBJECT TO ARREST . . .](https://www.ethosinsurance.com/hs-fs/hubfs/Warning%20sign%20by%20trail%20in%20state%20park%20RESTRICTED%20AREA%20.%20.%20.%20VIOLATORS%20SUBJECT%20TO%20ARREST%20.%20.%20..jpeg?width=600&height=399&name=Warning%20sign%20by%20trail%20in%20state%20park%20RESTRICTED%20AREA%20.%20.%20.%20VIOLATORS%20SUBJECT%20TO%20ARREST%20.%20.%20..jpeg) For the record, I believe reasonable BOR restrictions are appropriate. After all, I believe the applicant/insured who initially committed to work with the placing retail agent should be held accountable for that decision. Likewise, the retail agent who committed to work with the placing wholesale broker should be held accountable for that decision. For those reasons I don’t think it would be fair to make it too easy for the decision to work with a particular retail agent or wholesale broker to be changed. But then in my opinion, not allowing mid-term BOR’s at all or, certainly, not allowing BOR’s under any circumstances, are unreasonable restrictions. After all, things change - relationships change, people move to other companies or simply retire and sometimes relationships just end.   ## Focus on What You Can Control ![Untitled-4](https://www.ethosinsurance.com/hs-fs/hubfs/Untitled-4.jpeg?width=600&height=338&name=Untitled-4.jpeg) In our industry business comes and goes for all kinds of reasons – many of which are outside of the retail agent’s/wholesale broker’s control. And yet at Ethos BOR’s have always been much more often in our favor than not. We attribute this to focusing on the things we can control – primarily being selective about who we choose to accept as retail customers and the level of service we provide to them. By working with quality retail customers and consistently doing everything we can to empower them to take care of their healthcare clients’ needs we insulate ourselves from detrimental BOR situations even as we position ourselves to bring on additional business via BOR.   ## Elevate Accountability for the Good of All ![The Scales of Justice-1](https://www.ethosinsurance.com/hs-fs/hubfs/AI-Generated%20Media/Images/The%20Scales%20of%20Justice-1.jpeg?width=600&height=343&name=The%20Scales%20of%20Justice-1.jpeg) Ultimately, I believe anything beyond reasonable BOR restrictions serve, at best, to reward poor performance or, at worst, insulate bad retail agent/wholesale broker actors, to the detriment of those applicant/insureds and retail agents who should be able to choose who they want to work with. On the other hand, the accountability imposed on retail agents and wholesale brokers by allowing BOR’s to take place with reasonable restrictions provides a strong incentive for them to cultivate expertise and a culture of providing consistently solid service to their respective customers. Now that is something I believe is good for all of us.    --- **What’s Next?**  | [![Have HPL? Chat With Us Today](https://hubspot-no-cache-na2-prod.s3.amazonaws.com/cta/default/8644502/4b052511-5480-4416-beff-820aac4cc5d4.png)](https://hubspot-cta-redirect-na2-prod.s3.amazonaws.com/cta/redirect/8644502/4b052511-5480-4416-beff-820aac4cc5d4) |  [![Learning Center Problems with Wholesalers](https://hubspot-no-cache-na2-prod.s3.amazonaws.com/cta/default/8644502/dea67bba-33f1-4c3a-815e-355bc878bd20.png)](https://hubspot-cta-redirect-na2-prod.s3.amazonaws.com/cta/redirect/8644502/dea67bba-33f1-4c3a-815e-355bc878bd20) | | --- | --- | [ David Huss ](https://www.ethosinsurance.com/blog/author/david-huss) David is Ethos’ Co-Founder and Chief Production Officer. He has decades of experience in the insurance industry during which he has played many roles, including that of a contract writer for a reinsurance brokerage firm, a management liability underwriter and, over the past 20 years, a wholesale broker focused exclusively on the healthcare professional liability (HPL) space. As a true HPL specialist David possesses a comprehensive understanding of professional liability exposures in the healthcare industry and is well-versed in the products and capabilities of Ethos’ numerous carrier partners. His role at Ethos includes supporting production support staff in their effort to efficiently solve HPL-related problems for retail customers, mentoring Ethos’ business development staff and working to develop and maintain relationships with carrier business development staff and underwriters. Personally, David enjoys building things, whether they be home projects or business ventures. He also enjoys sharing good food and good wine with friends and family. David looks forward to continuing to build Ethos and serving retail customers for years to come. Connect: [mailto:dhuss@ehtosinsurance.com](mailto:dhuss@ehtosinsurance.com) Don't forget to share this post: ## Related Articles [### 5 Ways Retail Agents Pay for Their Wholesale Insurance Broker April 3rd, 2026|7 min read ](https://www.ethosinsurance.com/blog/5-ways-retailers-pay-for-their-wholesale-insurance-broker) [### Why Premium Finance Companies Try to Involve Your Wholesaler June 6th, 2024|9 min read ](https://www.ethosinsurance.com/blog/why-premium-finance-companies-try-to-involve-your-wholesaler) [### 3 Problems with Involving Your Wholesaler in Premium Financing (and How to Solve Them) January 11th, 2024|6 min read ](https://www.ethosinsurance.com/blog/3-problems-with-involving-your-wholesaler-in-premium-financing-and-how-to-solve-them) [### MICRA – The E&S Perspective December 19th, 2022|5 min read ](https://www.ethosinsurance.com/blog/micra-the-es-perspective) [### 3 Ways to Use Internal Infrastructure to Manage Your Workforce August 1st, 2022|6 min read ](https://www.ethosinsurance.com/blog/3-ways-to-use-internal-infrastructure-to-manage-your-workforce) [### 4 Key Drivers of Infrastructure Development April 20th, 2022|5 min read ](https://www.ethosinsurance.com/blog/4-key-drivers-of-infrastructure-development) [### Ethos Differentiator: Small Healthcare Risks March 17th, 2022|3 min read ](https://www.ethosinsurance.com/blog/ethos-differentiator-small-healthcare-risks) [### Are You Your Wholesaler’s Target Customer? 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