You took the plunge and opened a business. You may be just starting out, or have been in business for awhile. Now, your hearing about agents, brokers, carriers and agencies and aren’t sure which you should choose for your business.
An agent will represent an insurance company as an intermediary. They may be captive, meaning they represent just one insurance company, or an independent, representing a number of insurance companies. In broad terms, the agent’s liability to the customer is administrative in scope.
Commercial Insurance Brokers work as independents with a broad scope of products to offer. Brokers hold a different license which often indicates a higher level of education and certifications than those of an agent.
Brokers in most cases have a higher standard of accountability to the customer. They have a duty to analyze and determine the scope of coverage required by your business. Often, a broker will charge administrative fees or higher premiums to help pay this increased level of expertise.
Brokers usually have a full range of coverage for businesses and may have specialists in their firm. They may also offer services like safety education, safe driving education and the more.
The larger your business is, the more important you should consider using a broker.
If you have a large number of employees, a large number of vehicles and drivers on the road, or work in a high risk business segment, it probably makes sense to use a broker.
If you have a small business, just a few employees, a couple of vehicles, and in a standard or low risk business segment, its fine to use an agent who specializes in business coverage.
Before deciding whether you will deal with an agent or broker, get as much information to make your decision. Other or similar businesses can offer insight, as can you trade organization or association. Your state department of insurance can also be a great resource.