Commercial Insurance Broker

Business owners are faced with unique challenges day in and day out. This, for many, is part of the allure of running a business. Along with the pitfalls of inventory, marketing, employees and growing the bottom line business owners are faced with another pressing concern, commercial business insurance. Commercial insurance can take on may forms and is largely dependent on the nature of your business operations.

There are some constant themes for most businesses; property coverage, general liability coverage, workers compensation. However, should your business be more niche specific you may require some unique coverage solutions, such as medical malpractice, architects and engineers, or inland marine coverage. To help one navigate the gauntlet of insurance companies and understand the end result often times business owners turn to commercial insurance brokers for help. Commercial insurance brokers can offer comprehensive solutions to your liability insurance needs. The two most common types of commercial insurance brokers are either “Retail” agencies or “Wholesale” agencies. Each serve their unique role in the placement of coverage.

Retail agencies have a one-to-one relationship with their clients. They are able to accurately triage the commercial insurance needs of their clients often through comprehensive reviews of their operations, contractual agreements, financial statements and loss history. Retail commercial insurance agencies often have the capabilities to place all lines of coverage directly for the client. Retail agencies fluctuate in size from publicly traded conglomerates to neighborhood run small business shops.

Obviously choosing a broker is largely dependent on the nature of your businesses operations. A regional commercial insurance broker, who knows the local economy, the needs of his community, and understands their clients concerns can be a fantastic fit for a local small business owner. However, should your company be highly technical with various areas of expertise you may not be best suited for a local producer. In situations like this a large cap brokerage firm would likely be your best bet. Commercial insurance brokers can be an economical solution for many business owners since most often the broker charges the insurance company with a commission to place the business with that company.

On the contrary wholesale agencies have a rather specific role to play in the insurance transaction. The wholesale commercial insurance broker is approached through the retail agent to place portions, or sometimes the entire balance of the insurance coverage with various insurance companies. The role of the wholesale agent is once removed from the client, at times resulting in more distant relationship between the client and the insurance agent; however, during this time the retail commercial insurance broker acts on behalf of the client as a conduit for the transaction.

Retail commercial insurance brokers access wholesale commercial insurance brokers to place coverage for their clients when time constraints become an issue. Wholesale commercial insurance brokers often succeed in placing coverage on a moments notice for their clients. Other areas where wholesale agencies excel are with the placement of specialized coverage. Often times a retail commercial insurance broker may lack the expertise needed in certain areas of business, such as in medical malpractice coverage. In this situation they would opt to have a wholesale agency place this line of coverage while they address the balance of the account.

Regardless of the broker/agent option you choose the process that they will take to procure your insurance coverage will be the same. After taking the necessary information from you as the client (applications, financial statements, business details). They will "market" your business out to a variety of insurance companies. Each company will underwrite the nature of risk your company has in relation to the coverage being sought. Each insurance company will then either decline to offer terms of coverage or present your broker with a quote for insurance. Your broker/agent will then compare and contrast the various capabilities each insurance company will have for your business, allowing you (through their guidance and suggestion) to determine which company you will ultimately choose to be your insurance provider.

Choosing a commercial insurance broker for your liability insurance is as important a decision you can make when it comes to the operations of your business. Having the safety net of full coverage for your business in the event of a loss can often be the determining factor in your businesses solvency. Take your time to explore the benefits of each type of agency and arm yourself with the knowledge needed to make a smart decision for your organization.Couple your own insurance savvy with that of a licensed insurance broker or agent can leave your business being fully protected from any peril that your business may face. Your small annual premium could be the most important money you spend to protect your business.