6-1 The broker is not a party to the insurance contract, which is a contract between the insurer and the insured, but an important part of the broker’s duty is to use reasonable skill to obtain effective cover for his client and he plays a key role in bringing the contract between the parties to conclusion. The broker’s duty to advise his client on matters relating to the insurance cover he arranges is considered in chapter 1.1 The broker’s duty extends to having a basic grasp of the legal issues relating to the cover he arranges and the broker will be expected to have an understanding, and be able to advise his client, on issues relating to the formation of the insurance contract. One issue of particular importance to the broker and his client is the question “when does a binding contract come into existence”? This is because the broker and his client owe duties to disclose information that is material to the risk before the conclusion of the contract;2 the duty ceases once there is a binding contract between the insurer and the insured.