Insurance policies are complex legal contracts, and getting more complex each year as new risk exposures and corresponding policies emerge (such as cyber policies). When you buy insurance for your business, the starting point is to select an insurance broker or agent to act as your advisor.
In my experience, many businesses do not give this crucial decision the attention it deserves. While I could write pages worth of advice about how to do make a good decision, here are three basic tips to get you started.
- Do your homework. Before you talk with candidates, do some research of your own. Find out which brokers/agents specialize in your industry to narrow the field. Do some searches on Google. Talk to your industry associations, or even your competitors to find out who the leaders are.
- Interview them. No, REALLY interview them. Once you’ve selected candidates, treat your initial meetings with them like job interviews, because that’s what they are. Ask for the resumes of the lead broker/agent in advance, as well as the resumes or bios of their team (individual coverage producers and support staff). Check them out on LinkedIn or other social media in advance. Check their license histories online – many state insurance department websites allow you to see if licensee brokers/agents and their brokerages/agencies have complaints or disciplinary history. Ask for references, especially from their other clients in your industry.
- Be choosy. This implies you are making a choice from several options, which means you are not interviewing and vetting only one or two candidates. It also means you are not making this decision at the 11th hour, but are instead treating this decision as one of the most important business decisions you make, which it is. You are entrusting these professionals to protect your business’ assets and income stream, and the livelihood of your employees and your families. Don’t rush the decision.
I’m often surprised at how few businesses carefully choose their insurance advisors. Business insurance policies vary widely in the coverages they provide, and the level of service available from the insurers that issue them. Taking the simple steps above will go a long way to making the best choices for your business.