Message from Desert Insurance Solutions:
Let’s start with the wrong way to buy business insurance: gather several brokers and have them each give you a quote to find out which is cheapest. There are two big problems with this approach:
1. You just created an incentive for one or more brokers to offer stripped down coverage to win your price-driven contest. Think you can compare all the proposals “apples to apples”? Not likely, unless you are an insurance expert with lots of time. Your proposals might look similar but the under the surface there can be significant differences in sublimits, coverages, claims handling and contract terms.
2. The reality is many brokers deal with the same insurance carriers. These carriers don’t want to deal with multiple broker submissions on the same account. So they could just accept the first broker submission and block the rest which means you might not get the best price from the broker you like most. Or they might just throw up their hands and refuse to underwrite which also could mean higher cost for you.
So what’s the right way to buy business insurance?
Run an interview process to select a broker. Then let your chosen broker shop your insurance and advise you.
A good commercial insurance broker will:
· analyze your risk
· make coverage recommendations
· help with your applications and paperwork
· market your case to carriers
· obtain premium financing
· assist with loss control
· counsel on claims
· for owners, check for personal/commercial gaps
What should you look when interviewing brokers?
1. Relevant experience Look for a broker with important commercial clients, clients in your industry group, experience working at a major broker and multistate licensing.
2. Independence You want an independent broker who can shop your case to multiple quality carriers. Brokers with “direct appointments” have earned the trust of carriers more than those who need to work through intermediaries.
3. Responsiveness What are your broker’s service standards? How fast can they get you a certificate? Is a human available 24/7/365? Who?
Your broker does not need to be from a large firm if they have relevant experience. Large brokers do well with very large clients but have a reputation for shuffling off smaller clients to junior people for service.
4. Compatibility Do you like and trust your broker? If this person wasn’t your broker, would you enjoy meeting for lunch? If your answer is no way, keep looking.
Bottom line When it comes to buying business insurance, you should first select the right broker, then let that broker work for you. That should get you the right insurance at the right price.
Carrie Babij, President
Desert Insurance Solutions, Inc.
La Quinta, CA/Scottsdale, AZ