What is a letter of appointment (LOA) in Australia?

A letter of appointment is the document that names a new insurance broker as your appointed broker for specified policies. It ends your previous broker's authority over those same policies. Some insurers call this a business policy transfer. It's the closest Australian equivalent to what's known in some other markets as a broker of record letter.

If you're unhappy with your current broker, or you've found one who understands your industry better, this is the document that makes the switch official.

Quick summary

• A letter of appointment names a new broker for the policies it lists, replacing your current broker for those same policies.
• The letter itself doesn't rewrite your policy. It doesn't guarantee your total cost stays identical, since broker fees can differ between brokers.
• A letter of appointment is different from a letter of authority, which is used to get a quote or review without switching. See the comparison below.
• Your new broker, including upcover, typically prepares the letter and coordinates the process with your insurer.

What does a letter of appointment do?

A letter of appointment is a formal document. As the policyholder, you use it to name a specific broker as your appointed broker for the policies listed on it. It authorises that broker to manage those policies, including future renewals and any fees or commissions connected to that work.

Once it's signed and processed by your insurer, your previous broker no longer has authority over the listed policies. If you're planning to change insurance brokers in Australia, this is the one document that actually makes the switch happen.

A letter of appointment doesn't create a new insurance contract and doesn't rewrite the terms of your existing one. It changes who manages the relationship with your insurer for the policies listed, not what those policies cover.

Letter of appointment vs letter of authority: which do you need?

These two documents are often confused, but they serve different purposes.

Letter of appointment

• What it does: Appoints a broker for specified policies and ends the previous broker's authority over them
• When you'd use it: You've decided to switch brokers

Letter of authority (sometimes a letter of authority to review and quote)

• What it does: Lets a prospective broker collect your policy information from your insurer, without switching your broker
• When you'd use it: You want a quote or a second opinion before deciding whether to switch

A letter of authority lets a prospective broker see your current cover and put together a comparison, but it doesn't hand them any authority to manage your policy. It typically comes with a limited validity period, since insurers generally won't act on one that's been sitting unused for months. Nothing changes with your existing broker unless you go on to sign a letter of appointment.

Signs it might be time to change your insurance broker

If you're weighing up whether to change insurance broker in Australia, a letter of appointment is worth considering once your current broker relationship isn't working. Common signs include:

• Slow response times - You're chasing quotes, certificates or renewal information rather than getting them proactively.
• Limited industry knowledge - Your broker doesn't understand the specific risks your business or industry actually faces. A gap like missing Professional Indemnity or Management Liability cover can go unflagged until it becomes a problem.
• Outgrown cover - Your business has scaled past the basic policies you started with, and your broker hasn't kept pace with more complex needs.
• Weak claims support - The real test of a broker is what happens during a claim, not at renewal.

Changing brokers doesn't require waiting until your policy renews, though it's worth checking your current engagement terms for anything that affects the timing.

What should you check before signing a letter of appointment?

Before you sign, it's worth confirming a few things with your prospective broker so nothing catches you out mid-switch.

• Which policies are moving. Confirm exactly which policies the letter covers. You can appoint a new broker for some policies while leaving others with your current broker.
• Open claims. Ask how an existing or recent claim will be handled during the transition, and who you'll deal with if something comes up.
• What services you'll get. Confirm what the new broker actually provides, such as renewal reviews, certificate requests or claims support.
• Fees and commission. Ask how the new broker is remunerated, since this can differ from your current arrangement even though your policy itself doesn't change.
• Your current engagement terms. Check whether your existing broker agreement has any conditions that apply if you switch mid-term.

What information goes in a letter of appointment?

Most letters of appointment cover the same core details, whichever broker prepares it.

• Business details. Your legal business name, address and contact details.
• New broker's details. The broker's name and AFSL details, or Corporate Authorised Representative and licensee details where the broker operates that way.
• Effective date. The date the appointment takes effect.
• Policy details. The specific policies or policy numbers the appointment applies to.
• Revocation clause. A statement confirming this appointment ends the previous broker's authority over those policies.

How do you change insurance brokers with a letter of appointment?

The process is largely administrative once you've decided to switch.

1. You sign the letter of appointment. It's usually printed on your business letterhead and signed by an authorised person, such as a director, owner or financial controller.
2. Your new broker submits it to your insurer. This is usually handled for you, not something you need to send yourself.
3. Your insurer processes and acknowledges it. This confirms your new broker as the authorised contact for the listed policies.
4. Your previous broker's authority ends for the policies covered by the letter, once the insurer has processed it.

Your existing policy terms stay in place throughout this process. What changes is who manages the relationship with your insurer, not the cover itself.

Who needs to sign a letter of appointment?

The signature needs to come from someone with authority to act for your business, such as a director, sole trader, company secretary or financial controller. It shouldn't come from just any staff member. Your new broker prepares the letter and gives you the details to check first.

Using the wrong signatory can cause an insurer to query or delay a letter of appointment. It's worth confirming who's authorised before you sign.

Do you need a template for a letter of appointment?

You don't need to draft one from scratch. The National Insurance Brokers Association (NIBA) publishes standard templates for both letters of appointment and letters of authority. Most brokers, including upcover, will prepare the letter for you as part of the switch.

What matters more than the exact template is making sure the details are correct. The right business name, the right broker licensing details, and the right policies listed all need to match, or processing can be delayed.

How to switch your insurance broker to upcover

If you've decided to move your existing policies to upcover, we can handle the letter of appointment and coordinate the process with your insurer, so you don't need to draft anything yourself.

If you're not ready to switch yet and just want a second opinion on your current cover, that's a different starting point. A quick review of your existing policies can often surface a gap your current broker hasn't flagged, without committing to anything.

Get a quote with upcover

About upcover

upcover is a digital-first insurance broker helping Australian small businesses get the right insurance without the paperwork or phone queues. upcover arranges insurance for businesses across Australia, with access to 80+ insurance partners.

• 70,000+ businesses covered across Australia.
• 4.9/5 customer rating.
• Instant Certificate of Currency on policy confirmation.

upcover is a Corporate Authorised Representative (CAR 1299211) of Experience Insurance Services Pty Ltd ABN 41 657 596 506, AFSL 539078.

Frequently asked questions

What does a letter of appointment mean in insurance?

It's the document that names a new broker as the appointed broker for specified policies and ends the previous broker's authority over them. It doesn't create a new policy or rewrite your existing cover.

When does a letter of appointment take effect?

Generally once it's signed and your insurer has processed it. The signing itself takes minutes, but full processing depends on your insurer and can take longer.

Does a letter of appointment change my premium or cover?

The letter itself doesn't rewrite your policy terms. It's worth checking broker fees or commission separately, since these can differ between brokers even when the underlying policy doesn't change.

What's the difference between a letter of appointment and a letter of authority?

A letter of appointment switches your broker for specified policies. A letter of authority only lets a prospective broker see your current policy details to prepare a quote, without switching anything.

Can I appoint different brokers for different policies?

Yes. A letter of appointment can cover some of your policies while leaving others with your current broker, as long as it clearly lists which policies are moving.

What happens to an open claim if I change insurance broker?

Ask your new broker how this will be handled before you sign. In most cases, the claim itself continues under your existing policy, but who you deal with day-to-day can change.

Do I need a template to write a letter of appointment?

No. NIBA provides standard templates, and most brokers, including upcover, will prepare the letter for you as part of the switch.

Can I use a letter of authority before deciding to switch?

Yes. A letter of authority lets a prospective broker review your current cover and provide a quote, without appointing them or ending your current broker's authority.

‍

_{The information in this article has been prepared without taking into account your individual needs, objectives or financial situation. It should not be relied upon as personal advice. All insurance products arranged through upcover are subject to the terms, conditions, limits and exclusions contained in the relevant policy wording and Product Disclosure Statement. Before deciding whether a particular insurance product is right for you, please read the relevant PDS and consider your personal circumstances. upcover Pty Ltd ABN 17 628 197 437 is a Corporate Authorised Representative (CAR 1299211) of Experience Insurance Services Pty Ltd ABN 41 657 596 506, AFSL 539078. upcover arranges insurance products with selected insurers and underwriters and does not compare all general insurers or insurance products available in the market.}