Much like deciding on an insurance policy or company, picking the right commercial insurance agent is equally important—if not more so. Commercial insurance brokers negotiate with insurance companies on your behalf as well as give you information and advice regarding different policies. The goal here is to help you select the right policy for your business needs.
It follows that an inept commercial broker can put your business at risk if you pick the wrong policy based on his or her advice. This is why careful consideration is necessary when deciding on a broker. Does he or she ask the right questions when negotiating your policy? Does the broker fully understand the industry you operate in?
To help you find the right commercial insurance agent for your business, follow our four handy tips. But first we explain the different types of brokers.
Types of Brokers
Did you know that there are two types of commercial insurance brokers? It’s important to make that distinction to properly weigh the pros and cons of each.
Captive Agent
A captive agent is affiliated to one insurance company. This means that he or she can only sell insurance policies for that one company.
The challenge with captive agents is that they’re often limited with regards to the coverage and premium prices they can offer you. Plus, usually their loyalties lie with their employer and not you. They might not necessarily act in your best interests but in those of their company instead.
Independent Insurance Broker
Your other option is to pick an independent broker. As the term implies, this agent has relationships with many insurance companies. In this case, he or she can offer you different policies, coverage and premiums depending on your business needs. And chances are that independent brokers will put your coverage needs before the companies’.
Bear in mind that how valuable these brokers are will depend on how fiscally sound they are. This will determine if they indeed have the best insurance companies in their portfolio.
Tips to Consider When Choosing A Commercial Insurance Broker
To pick the right commercial insurance broker, ask yourself the following questions.
What Kind of Insurance Companies Does the Broker Represent?
In the case of the independent brokers, it’s imperative that you investigate the insurance companies they represent. Ideally you want companies that are reputable. Don’t leave everything in your broker’s hands. Do you your own due diligence.
Find out whether the insurance companies represented:
- Are A-rated with regards to their credit rating. This information is easily available on credit score websites.
- Are financially sound. The last thing you need is to pay high premiums to an insurance company only for it to give you endless excuses when it’s time for a pay-out.
- Offer insurance products you need. Will all the necessary aspects of your business be fully protected if you sign-up with them?
Is the Broker Licensed?
This might seem obvious but for a broker to sell insurance, he or she must be licensed. But what’s key to note is that licences vary from one state to the next. What you need to ensure is that the broker you pick has the correct license that covers your company’s geographical operations.
What if you operate in different states or other countries? Ensure that you look for an agent with a license that covers all your areas of interest.
How Knowledgeable is the Broker?
You need to find a business insurance broker who has extensive knowledge about a wide range of commercial insurance products. This is where their education, experience and qualifications come into play.
Also, find an agent who understands the following:
- How your business operates
- The risks involved
- Who you do business with
Such a person can better advise you on the best policy to pick which ensures that you’re covered against all eventualities.
Look for a broker who can offer you products that not only meet your business needs currently but in future. As a business grows or expands, its insurance needs are likely to change. A knowledgeable broker is able to change or adjust your coverage needs when necessary.
If the broker doesn’t know everything, at least he or she should be willing to learn and do the necessary research.
How is the Broker’s Reputation?
Before picking a broker, it’s important to find out about his or her reputation. Lucky for you, such information is readily available. Take your cue from the following:
- Past experiences from people who’ve used the brokers’ services
- Read up on reviews, complaints and feedback
- Google the agency’s name and check if there are any lawsuits against them
Granted, you’re likely to find one or two disgruntled customers with negative feedback. But check if the overall feedback rating is favourable or not.
Also, consider if the broker or agency has online presence. Most legitimate brokers usually set up websites for transparency. Check that the site looks professional and whether it has useful or informative content such as testimonials. It’s also a good idea to check their social platforms to get insight on the company.
Conclusion
Are you now confident that you’ll pick the right commercial broker agent for your business? Did you find these tips useful? Let us know.