Business insurance brokers are considered liaisons between insurance companies and clients. The unique aspect of an insurance broker is that a broker does not work for only one company. He often works for multiple companies, offering a competitive advantage to clients. Brokers offer benefits to customers and insurance companies.
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A captive agent is often confused with an insurance broker. A captive agent refers to an insurance agent who works for only one company. This agent can only give quotes from the company he works for. An insurance broker, on the other hand, can offer multiple quotes to clients, from multiple companies.
Duties of a Broker
A business insurance broker is a broker who focuses only on business insurance. This broker targets businesses of all sizes and his main responsibility is to match up clients with insurance companies. After finding potential customers, a business insurance broker performs a three-step process.
1. Collects Data: The first duty of the insurance broker is to collect the necessary information to give the potential client accurate quotes. The information he needs varies based on the needs of the customer.
2. Analyzes Data: The second step of the broker is to analyze the information he collected.
3. Offers Quotes: After analyzing the information, the broker finds several quotes from different insurance companies. He gives this information to the client, explains each policy and answers any questions the client may have.
Purpose of Business Insurance
Business insurance is vital for all businesses. There are different kinds of insurance, but the two most common types are property insurance and liability insurance.
• Business Property Insurance: The purpose of this type of insurance is to protect the assets of the business. Property business insurance can cover buildings, equipment, supplies, office furniture and many other types of tangible property a business has. It can also cover property such as computers, software and business records.
• Liability Insurance: The purpose of this type of insurance is to cover other types of losses or casualties. Liability insurance covers personal and advertising injuries, legal matters, medical expenses and many other types of liability issues.
Benefits of Using a Broker
Why do people use a business insurance broker instead of simply calling an insurance agent? The answer to this question is quite simple; brokers offer benefits to customers. A broker offers more competitive quotes and eliminates the need for the customer to request quotes from several companies.
• Competitive Rates: Instantly a business can request quotes for business insurance and the broker works hard to find several really good quotes.
• Eliminates the Need for Multiple Quotes: As a customer, you will only need to give the information once to someone. That broker uses the same information to obtain several quotes. This saves the customer time and headaches, and eliminates the need for the customer to make their own comparisons.
• Knowledge: A business insurance broker specializes in business insurance. He knows what to look for, and what to avoid. This aspect alone benefits the customer.
• It’s Free: Customers who use brokers do not pay the broker a penny for the services. These services are completely free to customers. A broker earns his income from the insurance companies. When a client chooses a policy with the broker, the chosen insurance company pays the broker a fee for his services. Insurance companies often look at this as a cost of doing business. The insurance company does not have to look for clients, but instead, the broker finds the company clients.
Importance of Business Insurance
Business insurance is important for all businesses. It protects the business against natural disasters, accidents and liability issues. Depending on the business, this type of insurance can be quite costly, and many businesses don’t even know what to look for in a business policy. This leaves many businesses with policies that are inadequate, or policies that offer too much coverage, covering things that are not necessary.
How to Choose Broker
Always make sure the broker is licensed and up-to-date on all necessary requirements. In almost every state in the U.S. insurance agents and brokers are both required to be licensed. Most agents and brokers also regularly attend classes, conferences or seminars. This ensures that they are up-to-date on all of the latest regulations and requirements in the insurance industry. Ask your friends and colleagues. Word of mouth is one of the greatest tools used for finding a broker.
Business insurance brokers are beneficial for both the insurance companies and insurance customers. When you are given insurance quotes, whether they are from an agent or a broker, always read through them thoroughly to make sure they are accurate, complete and what your business needs.