Made to Measure: Is your company's Insurance Broker a Good Fit?

Commercial Insurance Brokers are not all made equal. The quality of service and level of expertise you receive can change drastically by switching your company to a new brokerage firm, even if you keep the exact same insurance policies in place.

Despite this reality, many people believe that so long as their company has an insurance broker sending them a renewal each year, they do not have to give their choice of broker a second thought. A surprising number of businesses stay indefinitely with whichever broker insured them in their first year. This can create huge problems. A small business broker, who perhaps specializes in efficient service and low prices for start-up companies, may quickly find themselves out of their depth as the start-up grows in size and complexity.

Brokers are fighting everyday to retain their customers and are unlikely to tell a client, especially a long standing one, that they no longer have the expertise or resources to provide satisfactory service. The responsibility for deciding to change brokers rests with the insured. Companies must exercise due diligence and compare their current broker to the competition.

What follows below is a list of questions that are meant to get you thinking critically about your company’s current insurance broker. Brokers demonstrate their quality of service in a hundred ways, large and small. The challenge is to define your company’s unique service expectations, then have a frank conversation with your broker as to whether they can realistically deliver on those expectations.

I hope that this list of questions will help you develop a clear understanding of what your company needs from it's broker. Once you understand what type of service your company needs, you will know whether or not your current broker is providing it.

Quality of Service Questions:

Ask yourself these questions about your company’s current insurance broker and decide how satisfied you are with the answers…

1)     Renewals:

• Do you understand why your broker is (or is not) going to market for alternative insurance quotations this year?
• Does your broker explain how your policies are rated and what steps you can take to secure a better renewal price?
• Is your broker tracking your renewal pricing year over year against your coverage limits? Can he provide you with this information in a spreadsheet or other easy to understand format?
• How far in advance does your broker start the renewal process (ex: 30, 60, or 90 days out)? Does this time-frame work for you?
• Is your broker asking questions about what is new or different at your company to make sure the insurance in place is keeping up with your company’s changing needs?

2)     Certificates of Insurance:

• Does your broker always deliver certificates to you within the agreed upon turnaround time?
• Are your certificates delivered to you free from errors and compliant with the specific certificate request being fulfilled?
• Does your broker offer direct uploading to ISN or other certificate management systems?

3)     Claims:

• Does your broker follow up with the adjuster on your behalf for status updates?
• Does your broker check-in with you to make sure your claim is going well and that you are satisfied with your assigned adjuster?
• Has your broker demonstrated a willingness to advocate on your company's behalf for a more favorable settlement?
• Has your broker explained how the claim process works with each of your current policies and what to do when you need to file a new claim?

4)     Surety (Bonding):

• Can your broker help you to open a bonding facility?
• What is your broker’s bond issuance turnaround time?
• Does your broker successfully secure the limits that you need? If not, has your broker explained why you are not able to secure a bond?

5)     Changes to Insurance:

• Is your broker tracking changes that either you or the insurer made to your company's insurance policies?
• Is your broker keeping track of how changes have affected premium &/or risk exposure?
• Has a clear expectation been set for how long it will take your broker to respond to your company’s change requests? Does your broker abide by this time-frame?

6)     Pro-activity & Engagement:

• Is your broker regularly recommending changes and tweaks that can either save your company money or provide coverage that is a better fit for your company’s changing needs?
• Are you satisfied with how much information your broker provides without being asked?
• Does your broker provide you with information on insurance products your company does not currently purchase that would be a good investment? If so, does he clearly explain why you should consider adding the product to your company's program of insurance?

7)     Contract Review:

• Is your broker willing to review MSAs, lease agreements, or other formal written agreements and comment on potential liability exposures that signing the agreement will have for your company?
• Does your broker offer to read the stated insurance requirements from your various contracts on your behalf to ensure that your current policies are compliant?
• If your broker does provide the above services, is the turnaround time reasonable?

8)     Broker Knowledge:

• Does your broker educate you on insurance?
• Does your broker find the answers to your questions promptly when they do not know off-hand?
• Does your broker keep up with the news and changes in your industry?
• Can your broker comment on the best risk management practices for your industry?

9)     Communication & Availability:

• Is your broker quick enough to respond by phone or email? Have you discussed clear expectations for your desired response time?
• Do you have an assigned representative at your brokerage, or do you speak with someone different each time you call?
• Does your broker visit you in person?
• Does your broker offer regularly scheduled check-ins throughout the year?
• Has your broker asked what mode of communication you prefer?
• Has your broker explained clearly what days/times they are available during the week? Are you satisfied with their availability?

Written By: John Boone, CIP. 2019.