A Guide to Commercial Insurance Agents and Brokers

Understand the value and costs of commercial insurance for your business

Commercial insurance agents and brokers can be valuable resources in the development of your company's long-term insurance and financial planning. Utilizing their value begins with understanding their roles and distinctions.

Commercial insurance agents fall into two categories - captive and independent. Captive agents work for and sell insurance from one company only, while independent agents work for a variety of insurers and offer a variety of products. Similar to commercial insurance agents, commercial insurance brokers offer a plethora of insurance products through many commercial insurance agencies. In contrast to agents, these individuals often have a state-imposed duty to analyze a business and secure appropriate coverage.

To find an insurance agent or broker who specializes in your industry, take the following steps:

1. Request recommendations from business colleagues.

2. Contact professional organizations.

3. Network with insurance professionals in local chambers of commerce or community organizations.

Determine whether a commercial insurance agent or commercial insurance broker is right

Generally, larger businesses opt to use brokers and smaller businesses opt to use agents. Specific factors to consider before making a decision include: number of employees; level of risk in your business; number of vehicles used; frequency of review of the business insurance plan, and the difference in commercial insurance rates provided by agents versus brokers.
Try: 

For an overview of the points that you need to consider before selecting an agent or broker, go to the National Federation of Independent Business. Also visit VentureStreet, a professional network that pairs consumers with insurance agents in their area based upon specific requirements.

Research commercial insurance agents and brokers

After obtaining recommendations from colleagues as well as professional and community organizations, arrange face-to-face meetings with all commercial insurance agents and brokers on your list. Research their background, looking for valid licenses and disciplinary action.
Try: 

Each state has a department of insurance that tracks agents and brokers licensed to do business in that state. The National Association of Insurance Commissioners contains links to every state insurance department and allows you to research individuals by name. You can also obtain a reliability report on an affiliated agency or brokerage firm by submitting the company's name on the Better Business Bureau website.

Carefully review commercial insurance rates and products offered by a broker or agent

Insurance professionals working for commercial insurance agencies or commercial insurance brokerage firms receive compensation via a salary and/or some form of commission. As a result, they have an incentive to sell more products to consumers. A careful review of products offered as well as the rates for commercial insurance coverage will prevent excess spending.
Try: 

Shop around so that you can compare prices and understand the services available. The Insurance Information Institute provides an overview of the types of policies that a business may need, while 4freequotes.com allows you to complete a simple online request form and quickly obtain rates from various companies.

• Inquire about ways to reduce commercial insurance costs. Implement recommendations offered by your insurer to reduce premiums.

Copyright © 2011 Business.com, Inc. All Rights Reserved.