How to Choose an Insurance Broker for Your Business
With over 1 million insurance brokers, agents and service employees throughout the U.S., it’s easy to feel overwhelmed at the thought of choosing the right insurance professional to partner with your business. We’re going to make it easier by explaining why you will benefit from enlisting an insurance broker and how to choose the best insurance broker for your business.
Benefits of Working With an Insurance Broker
First, let’s talk about why you should work with an insurance broker. The term “insurance broker” is often conflated or confused with an insurance agent. While both a broker and an agent can help set you up with insurance policies, there is a key difference between an agent and a broker.
An agent works for one or more insurance companies. If an insurance agent only represents one insurance carrier, they are known as a captive agent. When you work with a captive agent, you’ll be limited to only the policies they can offer from their single carrier. Even independent agents are limited to the carriers they represent and won’t be able to look elsewhere if they can’t find a good fit for your business among those carriers.
An insurance broker, on the other hand, represents you instead of representing an insurance carrier. They work for brokerages instead of insurance companies. A broker can help you determine your risks and work on your behalf to obtain insurance coverage for your business to help mitigate these risks. While they may choose to work with certain carriers, they’ll have more freedom to find policies and negotiate the details of those policies to fit your needs best.
Once you understand what an insurance broker is, it becomes clear why working with one is a great move for businesses that want to get the best insurance coverage at rates they can afford. Like working with a real estate agent when you buy a home, an insurance broker will receive a small commission as part of the policies you purchase. With their ability to find and negotiate the best policies, they can help you save money in the end.
Steps to Choosing the Best Insurance Broker
Each company’s path to finding a great insurance broker to partner with may look a bit different. If you’re not sure where to start, try following these steps to choosing an insurance broker for your business.
1. Assess Your Needs
No matter whether you plan to work with an agent or a broker, when you look to buy insurance for your business, it’s always smart to start by determining your insurance needs.
Once you partner with a broker, they will be able to share their own expertise and help you assess the risks in your business, but conduct your own assessment first so you have an idea of what sorts of policies you might need. This way, you can look for a broker with experience in those areas.
2. Do Your Research
Next, begin to research to find possible brokers to work with. Some simple internet search terms like “insurance brokers near me” or “[your state] insurance brokers” are a fine place to start.
Ask around to business colleagues and friends to see if anyone has worked with an insurance broker they would recommend. Look for a broker who has worked with businesses and not just individuals. It’s a huge plus if they have experience in your industry, which is why you should ask other business owners in your industry if they can recommend a broker.
3. Create a Shortlist
Once you’ve done your research, you should be able to narrow down the field to a few brokers you may be interested in working with. You’ll have the chance to learn more about them, so it’s OK if you’re not sure which one to choose. This is just a first step to make your choice easier.
If a broker you hear about or find online doesn’t sound like a good fit, eliminate them. If the information you hear from colleagues or friends or on the internet seems promising, add this broker to your list. In some cases, your list may include the names of individual brokers, or it may include brokerages that have a reputation for providing people with excellent brokers.
4. Conduct Interviews
Once you’ve narrowed down your choices, plan to meet with these potentials in person. Remember, a broker works for you, so you should take the time to choose someone you’re confident in partnering with.
Think of these meetings as interviews or consultations where you can learn more about the insurance broker and what sort of expertise they can offer your company. Ask them questions to make sure they’re a good fit and they’re familiar with the sorts of insurance needs your industry faces.
Qualities You Should Look for in an Insurance Broker
Once you decide to work with an insurance broker, you have to find the right broker to work with. Choosing the best insurance broker comes down to finding a broker who checks some important boxes. Let’s look at four qualities a qualified insurance broker should have in addition to being licensed.
1. Positive References
Personal recommendations from friends or colleagues can help point you in the direction of a great insurance broker. However, even if you have a personal recommendation to go on, it’s still a good idea to ask for references from a broker you’re considering. The names of a few past or current clients can help you determine whether the broker would be a good fit for you to work with.
In addition to references the broker provides you with, check online reviews to see the unfiltered opinions of other clients. Pay attention to the qualities you see repeated across references and reviews:
- Is the broker easy to communicate with?
- Do they treat each client with care and respect?
- Are there any negative qualities to watch out for?
Having positive client references isn’t a guarantee that a broker will be the right fit for your business, but it’s an excellent start.
2. Professional Experience
Another thing to pay attention to is how long an insurance broker has been in the business. There’s certainly something to be said for new brokers who are eager to make a name for themselves. However, to make sure you’re in capable hands, you may prefer working with a brokerage that has been around for a decade or more.
Insurance brokers who are well-established are more likely to have expertise regarding insurance needs and solutions based on real-life situations. They are also more likely to have established working relationships with insurance carriers that know and trust them to find the best policy options for their clients. Years of experience can be a big plus when you’re looking for a commercial insurance broker.
3. Responsive Communication
Communication isn’t just important in your personal relationships. It’s also critical in your professional relationships — including your relationship with your insurance broker. Whether you like to communicate by phone or email, pay attention to how long it takes an insurance broker to get back with you when you leave a message. Other things to consider:
- Keep in mind that they may prioritize speaking with their clients before they engage with potential clients, but you should still expect a timely response.
- Responsive communication isn’t just about getting back with you quickly. You also want to make sure a broker is a good listener and thoughtfully considers the best ways to help you.
- If they share various options for policies with you, they should make the pros, cons and terms of each one clear.
Being able to communicate well with your broker is so crucial, so look for this great quality in any brokers you’re considering.
4. Commitment to Excellence
Finally, you want to look for an insurance broker committed to excellence in all they do. This may seem like a difficult quality to observe, but after learning about a broker and speaking with them, you should determine whether they seem like a high achiever or someone who has become complacent in their work.
Are they committed to attending conferences and classes or doing their own research to stay on top of relevant trends and developments in insurance as well as in the risks your industry faces? The appropriate licensure means that a broker is educated in what they do, but it doesn’t necessarily mean they are committed to learning more so they can continually find ways to do their job more effectively. A broker you partner with should be motivated and equipped to find you the best policies for your business.
Questions to Ask an Insurance Broker
Trying to choose a commercial insurance broker for your small business is a process that involves asking the right questions. In your research or communication with brokers you’re considering working with, try to answer some of these questions.
1. Which Carriers Do They Work With?
Though brokers can work independently and aren’t contractually bound to certain insurance carriers, it’s still a good idea to ask a broker you may partner with which insurance carriers they tend work with. If they work with several carriers, this is a sign that they will consider many options before settling on the best policies for you.
2. Are They Well-Versed in Commercial Policies?
Some insurance brokers are well-qualified to help individuals find auto insurance, homeowners insurance, life insurance and more, but they may be unfamiliar with commercial insurance policies. Businesses have their own set of insurance needs, so it’s critical that you work with an insurance broker who is well-versed in commercial policies. Make sure they have experience helping other businesses assess their risks and finding the right insurance policies to protect their employees, assets and customers.
3. Do They Have Experience In Your Industry?
Beyond just having experience with commercial insurance in general, it’s a huge benefit if your broker has experience in your industry specifically. For example:
- If you own a hotel, you should work with a broker who has extensive experience in the hospitality industry. This way, they’ll understand the unique risks you face in the hospitality business and know how to tailor solutions for your business.
- If you own a bar, you need someone who understands liquor liability insurance.
No matter your industry, you have unique insurance needs.
4. Do They Have Local Knowledge?
Brokers are required to be licensed in your state in order to work with your company, but it’s a major bonus if they are familiar with your city in particular. Different geographical regions, even within the same state, have their own risks when it comes to severe weather and natural disasters, for example.
Your city may also have its own regulations that influence your insurance coverage. If you partner with a broker who has local knowledge, you can trust they will understand how your location plays into your insurance needs.
5. What Makes Their Brokerage Different From the Competition?
Ask yourself this question as you research, and ask the brokers you interview, as well. They should be able to tell you what sets them personally or their brokerage as a whole apart from the competition:
- Do they have more experience in general?
- More specialized experience in your industry?
- Do they have a track record that other brokers can’t match?
Find out what makes them stand out so you can make the best decision.
Choose Your Broker
Your face-to-face meetings and the answers to your questions should help you form clear impressions of which brokers aren’t the best fit for your business and which you would be eager to partner with. Ideally, one broker should stand out from the rest as the best choice for your business.
Once you’ve made your decision, and a broker enthusiastically agrees to work with you, they can begin to work on your behalf to determine the policies you need and find or customize policies that will give you the necessary coverage for your business.
Partner With Kokkoris Insurance Services
When you’re confident you have the comprehensive insurance coverage you need for your business, you can enjoy peace of mind, knowing you’re well prepared for any potential problem you’ll face. The right insurance broker can help you find this coverage.
Consider partnering with Kokkoris Insurance Services. We are an insurance brokerage that has forged a reputation for excellence over more than 25 years in the business. We have extensive experience working with clients in the hospitality, restaurant, and bar and lounge industries, as well as contractors and developers.
We are committed to helping businesses find the coverage they need at rates they can afford. Contact us online or give us a call today. We can answer your questions and provide you with a no-obligation quote today.