There is a big difference between a transactional insurance agent and a risk management-minded insurance broker and it is time to evaluate who is really working for you!
Many times clients do not know the difference between an insurance agent and a risk management-minded broker. An insurance agent is typically an order taker that sells your company insurance products, collects the premium, and calls or visits you twelve months later when it is time for your insurance products to renew. A risk management-minded broker is one that takes a proactive approach in educating his or her clients to make sure that the proper risk mitigation protections are in place long before engaging the insurance companies to file a claim.
It is all too common to meet a company that has grown and changed significantly over the last few years while their current insurance agent has not paid much attention to the company’s evolving business, or its evolving insurance and risk management needs. A classic example: A business owner has been working hard to diversify revenue streams in his organization by expanding its service offering from security services to now offer janitorial services to its customer base. While the insurance products that were put in place years ago by the current agent may have been sufficient at the time, they are not properly protecting the client as the new program does not contemplate the new janitorial service offering which could potentially lead to a denial of coverage.
Also when working with your insurance agent you should be asking yourself if your agent is properly educating you and your management team relative to the associated risks of your business and the protocols that prevent accidents from occurring. A good risk management broker partner should be proactively touching base throughout the year relative to:
- operational changes,
- assisting with merger and acquisition due diligence,
- recommending methodical credentialing processes,
- contract reviews,
- vendor compliance,
- claims management, and
- safety training.
All of these learned and implemented procedures can lead to a very well managed risk-adverse company that will provide meaningful benefits that will last years to come. To name a few benefits: Promotion of a great working environment that entices employee tenure and attracts new employees, great claims experience that creates a competitive underwriting marketplace and lower overall insurance premium expense, cash flow management, a solid reputation within your industry, etc…
I often ask a very defining question of my clients: “What is in the best interest of your company?”
If you have not recently evaluated what kind of insurance broker is working for you now is the time to start thinking about what is in the best interest of your company to make sure that you are properly educated and protected!
Author: Alicia Furneaux