With a growing market of digital insurance products, you may be tempted to move away from working with an independent insurance agent. You might think it will save you time or money on your insurance. The truth is that insurance agents are experts in their field. Their job is to protect your business with the best possible coverage. Plus, they can save you and your executive staff time on combing through coverage benefits and exclusions.
What is an independent insurance agent?
Independent insurance agents sell insurance policies and coverages on behalf of the insurance companies they represent. Because these agents are “independent,” they work with multiple insurers. This allows them to evaluate and access different products and price points on behalf of their clients. They differ from so-called “captive agents,” who represent just one company.
Agents basically act as an intermediary between the customer and the insurance company in exchange for a commission. The insurer pays the commission.
Independent agents must be licensed by the department of insurance in the state or jurisdiction where they transact business. They take tests to demonstrate their competence and must keep up to date on their insurance education to maintain their licenses. Some operate their own small shops, while others join larger teams at local, regional or national agencies.
The key is finding someone who understands your business and has experience in commercial insurance.
Benefits of working with an independent insurance agent
Businesses that work with independent insurance agents benefit from:
A knowledgeable business advisor —An independent agent will know what insurance you need and walk you through the different policies available. A good independent agent can:
- Get you financial assistance if your property is damaged
- Advise you on how to help your employees if they are injured on the job
- Make sure your company can recover if your computer system is hacked
- Help you secure a surety bond that gets you the next contract
Insurance agents understand the industries they serve. They can sort through complex insurance options to save you time and help you prioritize coverages based on your risk and budget. The products they provide can also help your business comply with contractual terms and government regulations.
Help with the claims process — Though insurance agents do not actually process insurance claims on behalf of their business clients, they can help you file a claim. That includes ensuring you have all the proper documentation and evidence that the insurer will need to process your claim. Independent agents can also communicate with the insurance company regarding the status of your claim and keep you apprised so you are not wasting valuable time chasing down information.
Risk management expertise — Independent agents are experts at risk management, so they can help identify things that could put your business in jeopardy. This service is often provided as part of your business relationship and may include free resources. Some agents will even do a site inspection at your premises to help your company avoid liability and workers’ compensation claims.
Money-saving advice — Because independent agents work with multiple insurers, they can shop around for the best rates and coverages to meet your business needs. They may also be able to negotiate better coverage rates on your behalf because of their relationships with underwriters. Independent agents may be aware of other insurance policies that are available to protect your business from losses, such as cyber liability insurance or coverage for equipment breakdown. They can also offer advice on things like return-to-work programs to get injured employees back to meaningful duties, or how to efficiently manage a fleet of company vehicles.
An advocate — The rising frequency and severity of claims has led to a “hard market,” which means that insurance policies are more expensive but have lower coverage limits. Additionally, fewer insurers are willing to cover certain types of businesses or locations.
An insurance agent can advocate for you during a hard market and save you precious time and money. They will get to know your company’s strengths and risks and present that information to insurers so the underwriters have more than just numbers on a page.
Over time, your independent agent will become part of your core team of advisors. They’ll check that your insurance is consistent with any contracts you plan on signing and update your policy as your business needs change. An independent agent can help you protect your property, your people and your future.