Having the right professional on your side can mean success or failure for your business. One area of dispute among business owners is if it’s better to use a broker or agent for insurance coverage. Each has both pro and con, depending on the type of business or industry you operate in.
The insurance broker
Pro:
The advantage of using an insurance broker is the selection of companies and products they work with. If a broker favors just one company, your not getting the opportunity to get a “one stop shopping” experience. Most brokers will shop rates among a few companies and see which will be the most competitive, which save you from making multiple phone calls for rates.
The broker will offer you business insurance products and may also offer financial planning, or personal lines coverage. This will allow you to establish a close working relationship with your broker, and they will be very familiar with your business and personal needs.
Cons:
Since a broker deals with multiple companies they may not be aware of the insurance carriers contracts or claims procedures. A good broker will have close contacts within the headquarters of a insurance carrier, but that may not be the case with your broker.
The insurance agent
Pro:
The best part about working with a company agent is the “insider factor”. While a broker may have close contacts in the headquarters of an insurance company, an agent is probably very good friends with those same contacts. The agent will know all the right people to talk with in the company and can maneuver around the bureaucracy. The agent will also know the company products inside and out, which gets you the straight answers you need.
When it comes to filing a claim your personal agent can get the ball rolling.They can work direct with his/her co-workers at the home office, to get a check sent out as quick as possible. The broker being an outsider to the company may not be able to work as quickly as a company agent can.
Con:
The big disadvantage of the agent is the limited products they have to offer you. If your dealing with an agent that works for a professional liability company, they can’t help with your health insurance, or other products. Dealing with an agent with limited insurance products also means your going to be dealing with a lot more agents. Each agent dealing in their specialized area, will demand your time, and will require duplicate documentation for underwriting. This can end up costing you more money, and confusion if the insurance company has constant turnover of agents.
The type of insurance professional you select depends on your business type and style of management. While many favor the advantages of a broker, an equal number of business owners like the direct dealing with a company representative. Only you can decide what works best for your business.