Selecting a Commercial Insurance Agent

Selecting your commercial insurance agent can be as important as the insurance.

You may be just starting out, or have been in business for some time. It’s time to put all the pieces in place.  You’ve heard about agents and brokers and aren’t sure which you should use for your business.  Let’s break it down.

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.  Since many agents are captive, make sure to interview and review what they have to offer.

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.

Generally speaking, the larger your business is, the more important you should consider using a broker. Large can be both revenue and or the amount employees  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.  Brokers often have industry expertise and more resources to put together a comprehensive plan. If you have a small business, just a few employees, a couple of vehicles, and in a standard or low risk business segment, it can be fine to use an agent.

As always, 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 and your state department of insurance.

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Minimum Standards You Should Accept

What, you ask, are the minimum standards you should accept from your commercial insurance agent.

Partnership, value, and service are often bantered around in the commercial and personal insurance world.  What is value as it relates to your business with insurance? Partnership? Service? Don’t we expect a reasonable level of service from any vendor?

There is no vending machine to drop a dollar in that will produce the ideal agent or broker.  An engineer’s business insurance needs will differ from a convenience store’s insurance needs and a veterinary clinic’s insurance needs.  Let’s focus on what you feel you need to achieve value from your insurance provider and what is best for your business.

First, we suggest at least an annual review either face to face or by a dedicated phone call or webinar.  Any annual review is not a review of new rates and sign here and here. Instead, you should expect a review of your business, what’s changed, and what has changed with your agent and his business.

Depending on the type of business you have, the risk your business carries, and how fast your business is growing or changing, we also recommend a quarterly update phone call.  More or less contact needs to be determined by you as the client. You want to know your agent or broker is genuinely interested in your business and not just the commission. Have they recently toured your facility and inspected the equipment they are providing coverage on?  Asked for a video update if necessary? Are you and your company relegated to a junior staffer expect at renewal time, or are you dealing with a senor level producer or partner?

Set your expectations of what you want from your commercial agent and then get agreement when moving forward.  Your commercial agent must be a trusted advisor who has some understanding of your business and the risk involved in running that business.

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The Difference Between an Agent and a Broker

Now that you’ve gone into business for yourself, you’ve heard tell of insurance brokers and insurance agents. But you’re not clear on which one you should using.

An insurance agent is an insurance professional who represents an insurance company in the capacity of an intermediary. The agent may be captive, which means he represents a specific insurance company, or the agent may be an independent, meaning he represents more than one insurance company.

Suffice it to say that the agent’s responsibility to the client is administrative.

Insurance brokers work as independents who offer an array of products. A broker has a different kind of  license, and it usually requires a higher level of industry certifications and education than the licensing an agent must have

Usually, a broker’s standard of accountability to the customer is higher than the standard of an agent.

A broker has the duty to analyze and determine what scope of coverage your business needs. Further, a broker generally charges higher premiums and/or administrative fees in keeping with such an increased level of expertise.

Generally speaking, the larger your business, the more essential the knowledge and guidance of a broker becomes.

If you work in a high risk industry, or if you have a large number of employees, or vehicles, it makes good business sense to to use a broker rather than an agent.

If your business is small with few employees and a low risk or standard risk industry, an agent would work just fine for you.

As we always caution, you would be wise to amass  as much information as possible before you decide whether you need to go with a broker or an agent to make the best decision.

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Your Commercial Insurance Agent: Key Member?

Is your commercial insurance agent a key member of your team?

If you look at your business insurance as a necessary evil to be in business, you’re not alone. Do you have to look at a policy or an insurance bill to remember your agent’s name? If so, you’re in the majority of business owners, but it isn’t where you want to be.

It’s important to make your licensed insurance professional part of your key advisory team. No doubt you use a CPA for your taxes and attorney for your legal issues, but do you consider your commercial agent in the same category? If not, let’s examine why you should change that outlook.

You took a great number of risks to start your business. You took a financial risk. You took great number of personal risks. Your reputation, your relationship with your spouse and family, you risked a great deal to start your business. Why would you now continue to expose yourself to further risks? One frivolous lawsuit can ruin a business.

Do you know if your general liability would cover that type of lawsuit?

Do you know whether or not you need additional liability coverage from Professional Liability insurance?

Is your equipment and office fully covered under your present property insurance?

Do you know how the value of the claim will be determined?

Is it replacement cost or actual cash value?

Do you need loss of income or mechanical breakdown insurance now? What natural disasters are covered?

Your licensed insurance professional knows the answers to these questions and many more not asked here.

Successful big companies have a board of directors. While you’re growing your business to that level, why not create your own?

Your business attorney, accountant, and yes, your business insurance agent are the core of your board. Each should be a trusted advisor who you speak with on a regular basis. Your business insurance professional needs to become a key part of your team. Bring them up to date and spend some time with them. Let them know what has changed in your business and where you project the future to be so are fully covered.

Make sure you have the proper coverage in place to protect the hard work and passion you bring to work every day. Work with your advisors, all of them. Make them a resource and use them to further grow your business.

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Dissatisfaction With My Agent: What To Do?

What should I do if I am not happy with my agent?

Businesses and owners have different needs and sometimes personalities don’t mix.  Flower shops, restaurants, delivery services all have different needs and risks. What works for one and the agent servicing that business may not be a fit for another.

The words ‘value’ and ‘service’ often over used in advertising and even in the business insurance world.  Value is often subject entirely to an individual’s preference, and let’s face it; we all expect good service in any vendor/customer relationship.  So, let’s look at what expectations you can expect your licensed insurance professional to offer you and your business.

You should expect any call to your agent to be returned within 24 hours at a minimum.  An emergency number should also be provided in the event a claim is necessary during nights, holidays, or weekends.  It’s ok if the carrier provides this and not your agent.  Just be sure this number is available.

Having an annual review is critical.  An annual review is NOT here are the latest premiums, sign here.  Instead, you should expect a review of your business, what’s changed, and what has changed with your licensed insurance professional.

Depending on the type of business you have, the risk your business carries, and how fast your business is growing or changing, we also recommend a quarterly update phone call.  More contact or less needs to be determined with your licensed insurance professional and yourself depending on what you feel is important.

Make sure your agent has an interest in your business and your success.  Have they visited your site or at least asked for photos of the various equipment and location?  Make sure you are introduced to staff that may work on or service your account.  If it’s not a fit, you should feel comfortable saying something and getting someone new.  This is your business and you need to partner with an agent you can work with.

Set the expectations of what you expect from an agent or broker and find the right one to fit your needs. Your licensed insurance professional needs to be part of your advisory team.  Someone you can trust and turn to for advice and recommendations important to the success of your business.

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Commercial Insurance Agent

Working with your commercial insurance agent …

Let’s face it, most entrepreneurs and business owners have a passion for what they do.  Whether you’re an accountant, a tow truck company, a delivery service, or a flower shop, something ignited within you to risk opening your own small business.  Many business owners forget to focus some of this fire into protecting the business and the assets they have in place.

Chances are pretty good that if you have been in business for any amount of time, you have some commercial insurance in place.  It’s also a pretty good chance that it’s time to focus on the coverage in place and make sure you are protecting the business and yourself properly.

Do you look at your commercial insurance as just a necessity and have to look up your agent’s name?  If so, it may be time to re-evaluate that outlook.  It’s important to make your licensed insurance professional part of your key advisory team.  No doubt you use a CPA for your taxes and attorney for your legal issues, but do you consider your commercial insurance agent in the same category?  If not, let’s examine why you should change that outlook.

You took considerable personal and financial risk in starting a business.  Why continue to expose your business and assets without proper protection.  One frivolous lawsuit can ruin a business.  Do you know if your general liability insurance would cover that type of lawsuit?  Do you know whether or not you need additional liability coverage from Professional Liability insurance?  Is your equipment and office fully covered under your present property insurance?  Do you know how the value of the claim will be determined?  Is it replacement cost or actual cash value?  Do you need loss of income or mechanical breakdown insurance now?  What natural disasters are covered?

Your commercial insurance agent needs to become a key part of your team.  Bring them up to date and spend some time with them.  Let them know what has changed in your business and where you project the future to be so are fully covered.  Make sure you have the proper coverage in place to protect the hard work and passion you bring to work every day.

Commercial Insurance Agent

Is your commercial insurance agent right for your business?

Starting out in a new business can be overwhelming. Without a board of directors, it can seem like there is no one to turn to with questions. Fortunately, if you have a team of advisors in place; you just need to put them to work. In starting your business, you will need to use an attorney, an accountant, a banker, and an commercial insurance agent to get everything in place. The key is to use this team as advisors to help you with answers to those questions that will arise.

Lets focus on what a trusted advisor will look like as it pertains to the licensed insurance professional that will work as part of your team. It’s is important to look at your commercial insurance agent as a professional with level of importance as your attorney and accountant. Your agent will be working with you in determining the amount of risk and exposure your business will face and the best way to reduce it.

Your licensed insurance professional, your agent or broker, needs to work with you and bring to the table a level of expertise in insuring your business and its employees. When interviewing your insurance advisor, ask them for input. Are they willing to meet with you on a regular basis, talk on the phone periodically? Get references and check them.

In the past, we’ve talked about annual reviews, but find out if they are willing and able to put more into the success of your business. Are they willing and do they have the expertise to become an advisor for your business? Are they willing to tour your business? Are they willing to help hold you accountable to your plan?

Once you have found your trusted insurance advisor, it is important to give them what is needed to be effective. You as the owner need to keep your insurance professional up to date on things like new equipment purchases and upgrades, new employees, new locations and expansion planning, new product offerings, and other changes to your business. You also need to insure the other team members accept and understand your insurance advisor is part of the team.

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