A profit center for surplus line brokers is a facility where they take the insurer's pen and act as underwriters of all risks accepted through their facility on behalf of the insurer. Some of these agreements have little detail other than an agreement to write insurance. Then there are others, like the agreement that was the subject of litigation in GeoVera Specialty Insurance Co., Formerly Known As Usf&G Specialty Insurance Co. v. Graham Rogers Inc., No. 10-1943 (8th Cir. 04/13/2011).

GeoVera Specialty Insurance Co. (GeoVera) entered into such an agreement with Graham Rogers Inc. (Graham), a surplus line broker. GeoVera claimed that Graham breached the contract by allowing one of its retail brokers to submit a risk in Arkansas that did not fulfill the mandatory underwriting guidelines that were the basis of the contract between GeoVera and Graham.

GeoVera appealed a district court's grant of summary judgment to Graham on GeoVera's claims for breach of contract and negligence. The agreement required that Graham underwriter policies complied with the insurer's underwriting guidelines. GeoVera, an insurance company, and Graham, a wholesale insurance broker, entered into a surplus lines broker agreement effective June 1, 2003. "Subject to the underwriting rules and regulations" of GeoVera, the agreement authorized Graham "to market, present proposals of residential property insurance to [GeoVera] for its acceptance, and issue and deliver residential property insurance policies." By entering into the agreement, GeoVera sought to tap into Graham's network of retail insurance agents as long as the risks written complied with the guidelines.