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Small Business Insurance Simplified
Business Insurance Agents or Business Insurance Brokers, What's Better?
Tips For Working With Business Insurance Brokers
 People often get confused regarding the difference between a business insurance agent and a business insurance broker. To put it simply, an agent is a person who is either employed by or is acting on behalf of an insurance company.
A broker is an independent intermediary who uses his or her expertise in the field of insurance to set up a mutually beneficial agreement for insurance between an insurance company and the party looking for insurance.
Once people get to understand this, there is often a bias in favor of business insurance brokers. This is because people feel that while an agent will have the interests of the insurance company as their prime focus, a broker will be more caring of the client, since they are not tied to any one insurance company.
While this is true, it does not give the whole picture. Let us not forget that business insurance brokers are businessmen also and need to conduct their operations in such a way to ensure they make a profit. And the more profit, the better.
Profits Come From Commissions
Since the profits come from the commission that is paid to them by the insurance company, it will be foolish to think that brokers do not have loyalty to the insurance companies.
 The only difference it that unlike the agent, their loyalty is not to just one company, but to all those companies whose policies they sell.
Of course a business insurance broker is an independent businessman and his reputation is important to him. For this reason he cannot afford to leave a trail of dissatisfied customers behind him.
The word of mouth negative publicity will soon destroy his business.
So, the broker walks a fine line. He must keep the customer happy, but at the same time make a profit for the insurance company who will then pay him. This is where the problem sometimes lies.
Insurance companies often have a sliding scale of payments for brokers with the best performer, earning the highest commission or being rewarded in some other equally beneficial way – say a free vacation for the family.
Brokers Performance is Rated
The performance of the brokers is rated not just on the amount of business they get for the company and its value, but also the profitability of each policy they sell.
This means that often there are hidden savings options available in policies which business insurance brokers do not reveal to the customer. After all, a saving for the insured means less premium paid and so less profit for the insurance company.
A customer may also want to take out insurance he does not really need or where he can obtain better terms elsewhere in another form of policy. While the broker will create goodwill with the customer by revealing this information to him, he will be losing financially since the policy value will drop, as will his commission.
A business insurance broker, because of his independence from any specific insurance company and his expertise in the field, should be like an insurance advisor who helps his customers plan their insurance and the type and size of policies they need to ensure the best coverage at the best price.
And many business insurance brokers do just that, which is why they have built up such a loyal clientele who keep going back to them. This is the kind of business insurance broker that you should work with.
How Do I Find The Right Broker?
But the question most often asked is "how do I find the right broker?"
The answer to that question is very simple. If you know of other businesses that are happy with their insurance arrangements and the broker who helped them secure the insurance they have, contact those brokers.
Or if you do not have business contacts that can help you, do an online search and you will find more than enough responses. But before talking to any of them, see if they are business insurance brokers with specialization in the areas where you want insurance.
After you do that, you need to ask for customer references and contact these people to see what they have to say about the business insurance broker in question.
What To Look For In A Business Insurance Broker?
Once you get positive feedback, arrange to meet with the broker. During the meeting you need to look for openness, a willingness to explain things to a layman in detail and not to brush questions away.
Look for a broker who will tell you about the strength and weaknesses of different insurance companies and is willing to offer you clear and well defined insurance options to choose from.
If you get this and have a feeling of comfort in your dealings, then you can go ahead with finalizing your business insurance requirements.
But never forget that the business insurance broker is a businessman too and is out to make a profit.
What's Next
Next In This Guide
Part 11:
 How to Save Money on Business Insurance: Money saving tips when buying business insurance, such as increasing your premiums, purchasing a package policy, and eight others.
Previous In This guide
Part 9:
 Business Insurance Quotes: Where to Focus: Complex business insurance quotes are no fun. This article will simplify the process and help you focus on key areas.
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