An insurance broker represents multiple insurance companies allowing them to offer a wide range of products to clients.
An insurance agent typically represents only one insurance company with one product to offer.
Who would you rather have working for you?
The wild world of insurance can be very confusing for consumers:
- You feel forced to buy insurance to satisfy a lender.
- It’s complicated and costly.
- You hope you will never use it; when it is used, it’s due to either an inconvenience, loss, or possible injury.
It’s not surprising that people don’t want to purchase it and, quite simply, don’t like it.
As a broker for the past 30 years, I can confidently assure you that we are not the bad guys; our priority and passion are to work for our clients. Brokers offer multiple products from various insurance companies and provide expert advice, guidance and understanding to explain what it means for you.
If you are receiving nothing more than an annual invoice and reams of paper, then you should challenge your broker to educate you (and earn their commission).
Making The Distinction
An agent has one advantage over a broker: they are an expert with one product from one company only. This could work to your advantage because your agent should be able to ensure you are also an expert in understanding the one product they sell. The downside? There is only one option available to you.
Determining who an agent is can be increasingly more difficult, as well. Typically, an agent works for an insurance company, and the company name gives it away, for example, The Co-operators Insurance Company. Some agents call themselves brokers, but they are owned by an insurance company and are selling you only one product under the guise of a “brokerage.” If you’re unsure, be candid; ask your insurance representative if an insurance company owns their brokerage.
Now that you know the difference between an insurance broker and an insurance agent, you are armed with further insight when making your hiring decision. I’m not here to tell you who to hire (I’m biased!), however, please consider the following points when it’s time to decide.
- Whomever you hire should prove unequivocally that they are working on your behalf.
- They discuss the coverage options they have negotiated and presented for you. Ideally, they do this several weeks before your expiry date, so you have time to make an informed decision.
- They show that they understand your business almost as thoroughly as you do. This ensures they can represent it to insurers positively.
- They can advocate on your behalf should a claim occur. They help you to navigate the process and will get what you deserve, communicating with you at each step.
- Many insurance professionals specialize in a specific niche or industry, such as Auto Dealerships or Construction. Hiring those specialized individuals may prove to be of value to your business and will ensure it is appropriately protected.
As an entrepreneur, you know that there are many business risks to consider. At Gougeon, we work with our clients as part of their team, helping them to navigate the risks, simplify insurance and allowing them to focus on achieving success.
If your agent or broker is not highlighting emerging risks to you (for example, cyber liability coverage), then you could be more exposed than you can financially tolerate. If you’re dissatisfied with your current broker or agent, we’re here for you! We can perform a business risk assessment and show you the powers of hiring a great broker.