There is no easy way to select a commercial insurance broker. It is an imperfect process and varies greatly depending on your operation and the sophistication of your companies’ risk management program. Here are some basic guidelines to follow — and some traps to avoid — that will do the most good for your business and, ultimately, your bottom line.
Do interview potential brokers
Take the time to learn about the agencies. Establish an interview process that could allow you to make a decision at this juncture. Some key questions to ask a potential broker…
- What markets do they work with?
- How big are they?
- What is their experience in your industry?
- What does their service model look like?
- How do you like the potential broker?
- Are they someone you can trust?
- What are the agency resources available?
- Registry services?
- Claims support?
- Risk control?
For some companies, the interview process is where the competition may end. This will allow that one individual unfettered access to every insurance company available to compete for your business. As the broker selected, they will have the leverage to negotiate the most competitive program on your behalf.
Don’t include several agents to quote on your business
In the insurance industry, only one agent can approach one company on your behalf. The list of insurance companies that can offer competitive solutions for your business is limited. Minimizing the number of agencies involved will empower those individuals to access more markets on your behalf. This gives them better leverage to negotiate the best program for your renewal, oftentimes coordinating coverages through multiple insurance carriers.
Do assign markets
When you have selected the short list of agencies that will participate in your renewal process, allow the agencies to provide you with the list of markets they would like to approach on your behalf. You can delegate who gets to approach which company.
Don’t white out the premiums
If your goal is to get a better price on your insurance program, share the premiums you are currently paying.
Don’t shortchange the information gathering process
Once your potential agents review your policies, they should have a lot of questions. A lot! If they do not, this should be a red flag. This is why you hire brokers. Brokers are professionals who understand insurance and how to adequately design programs for your unique operation. If we don’t understand your operation, your policies will not adequately protect your business assets and employees at the time of a claim. The most expensive part of your insurance program will be an uncovered claim. Do not overlook this step.
In the insurance industry, only one agent can approach one company on your behalf.
Do provide claims history
It is time to have that conversation with your current agent. Only you and your prior agent are authorized to get your loss run reports. Lack of loss runs, typically five years of currently valued claims history, holds up the quoting process and leads to a delay in providing you with proposals. Too often, proposals are presented just weeks – if not days or hours – before your current program expires.
Utilizing these basic guidelines will put your company in the best position to secure a comprehensive risk management program at the most competitive price. More importantly, you will align yourself with a trusted business partner who will hopefully serve you well enough that there will be no need to undergo this selection process any time again in the near future.
For more information or to begin the process of broker selection for your business insurance, contact us.