While there isn’t exactly a right or wrong way of leading a business, because in its essence a business is like a living matter – susceptible to changes, taking precautions is one of the musts considering a business is a valuable asset that isn’t to be taken lightly. One way of handling this is by taking all potential risks into account, and instead of taking matters into your own hands, the surefire way is resorting to the help of professionals who have experience in dealing with business insurance. Yet, when it comes to taking this step, there’s the choice of choosing between an insurance broker and an agent. If you want to make the right decision, you have to know the difference.
At the very core of the job of insurance agents and brokers is the same goal – providing the insurance holder with insurance and financial services. However, while the insurance agent (or insurance sales agent) works for an insurance company and acts as the intermediary between the insurance policy holder and the insurance company, the broker works independently, focusing on the needs of the insurance holder. What this means is the insurance agent has you as a customer whereas the insurance broker has you as the client meaning brokers are in your service and have a bigger responsibility.
When wanting to choose from insurance agents and brokers, and ensure you get a policy that has your interests as a goal, then a broker is the choice to make. Unlike agents who offer available products from the insurance company they work for, brokers help you choose the most suitable products by looking into what different insurance companies offer, ensuring your interests are taken care of.
A broker thoroughly examines your business and tailors a policy by first negotiating favourable terms with insurers and underwriting agencies, providing packaged insurance solutions that meet the individual needs of your business which is different from the work of an agent, whose primary responsibility is to accurately fill and process forms and ensure all paperwork is timely prepared.
While both agents and brokers have to meet licensing requirements, brokers have a much bigger responsibility towards the client. An agent only has to know the insurance products of one company, but a broker has the flexibility of checking several companies’ insurance products and choosing those that provide the highest commission rates, in favour of their clients’ needs. By knowing the difference, you can make the right choice for your business because it’s certainly not something that you should risk.
