Commercial insurance brokers and insurance agents have some things in common, but the level of service they provide their clients with can be very different. An agent represents one or multiple specific insurance carriers and is limited to offering you coverage options from those particular carriers. Brokers, like our team at Conover, represent the insured and a wider range of carriers. Brokers act as intermediaries between the insured (an individual or business) and an insurance provider. In this blog, we’ll unpack what this means and clear up any confusion about what an insurance broker is and how they help individuals like you feel more confident in the coverages you have for your business.
The Main Difference Between Commercial Insurance Agents and Brokers
Both insurance agents and brokers essentially have the same objective in mind — to provide insurance solutions. However, there is a major difference in the way they approach this goal. This may impact the solutions that are presented to their clients.
Commercial Insurance Agents
Generally speaking, agents represent the insurance carrier first and foremost. This means their top priority is pitching that specific carrier and its commercial insurance products. This often limits the insurance products that are available to the client.
Commercial Insurance Brokers
Insurance brokers, on the other hand, work on behalf of their client (the insured) and can represent various insurance carriers.
Should You Work With One Over the Other?
There is no perfect answer since every business is unique and is looking for different levels of support. What we can say is that insurance policies are often daunting, full of complex terminology and dense fine print. Commercial insurance brokers can help their clients navigate all this knowledge and find solutions that match their situation.
You may have noticed that agents who are tied to one carrier tend to make price a major selling point, with catchy taglines like “switch and save.” While they may be able to offer some minor savings on premiums, the reality is that rates tend to be comparable between carriers. Brokers tend to focus more on what their clients need, looking out for their best interests, and helping to proactively manage their risk.
At Conover, our Commercial Insurance Brokers represent our clients first and act in their best interests. While we represent many carriers, we will review your needs and provide multiple options to fulfill your unique situation. We like to refer to our brokers as advisors and educators, as we teach our clients about their policies and the language in them.
The Main Types of Insurance Agencies
Now that we’ve covered the differences between insurance agents and brokers. Let’s break down the kinds of insurance agencies you can work with.
- Captive Agents – A captive agent differs from other types of agents because they only work for one insurance carrier. This means that their insurance costs and the insurance products and risk management solutions they offer are only those that their own company offers. These agents are easily identifiable because they usually work under the name of a large insurance company such as Allstate, State Farm, or Farmers Insurance. You see commercials for these companies on TV every night and get their jingles stuck in your head. These agents are typically employees of the insurance company they represent and are paid on commission for their insurance sales.
- Private Independent Agencies – These insurance agents can represent many different insurance companies, and typically focus on finding whatever option best suits their client's need, no matter which carrier it comes from. Conover is an example of an independent insurance agency.
- Public Independent Agencies – These insurance companies are often larger, so they tend to function more like national agencies. Public independent agencies may also have specific rules or limitations due to their need to appease stockholders or boards.
- Mom-and-Pop Agencies – These agencies are often smaller and may not have as many tools, resources, and carrier options as a larger agency. Although you may get great service from a local mom-and-pop agency, they may not be able to offer as many different solutions or quotes for your particular business.
What Commercial Brokers and Agents Have in Common
The biggest difference between commercial brokers and agents is in the flexibility and wide range of solutions they can offer you, as well as the individualized care and guidance some can provide over others.
However, any agency or company that specializes in business insurance will likely offer similar coverage types. You may find that some brokers and agents specialize in one type of insurance or another, but ultimately there are a handful of coverage types they offer.
- General Liability - This type of business liability insurance protects you from property damage or injuries such as falls, misleading advertising, or damage to a customer’s property. It can also cover legal defense costs if you are sued. This type of coverage is essential for your business if you have a location that is open to the public, work closely with clients or customers, own or rent commercial property, or handle property for your clients.
- Commercial Auto – This type of insurance covers property damage and medical payments related to a vehicle accident. It can also cover legal expenses if you are subject to a lawsuit. A commercial auto policy may also provide coverage for vandalism, theft, and other damages or losses. Most of these policies also include professional liability coverage if your employees get into an accident. You may need commercial auto insurance if you have a vehicle or fleet of vehicles tied to your business; carry tools, products, or equipment used for work; drive to and from work locations; or transport employees or clients.
- Commercial Property – This type of insurance is meant to cover the real estate of your business as well as its contents. It may help pay for replacements or repairs if your property is damaged, lost, or destroyed. Commercial property insurance makes it possible for you to bounce back after an unexpected event such as a fire, natural disaster, or break-in. You may need commercial property coverage if you own or rent a store, building, or office; rent or own expensive tools or equipment; have inventory or products; or depend on other valuable business assets.
- Workers’ Compensation – Most businesses in the U.S. are required to have workers’ compensation insurance. Although laws vary by state, a small business is typically required to have such an insurance policy as soon as they hire an employee. Even if it isn’t required by law, a workers’ comp policy can protect against lawsuits and medical expenses if an employee is injured on the job. Without workers’ compensation insurance, you may be responsible for legal fees and medical bills. Many states have penalties for failure to carry this type of insurance.
- Business Interruption – If your business is forced to shut down due to a business interruption caused by a fire, storm, or other covered incident, it can lead to financial loss and sometimes even permanent closure. Business interruption insurance helps your business stay afloat by covering the cost of relocation, day-to-day expenses, and lost revenue.
The Benefits of Working with a Commercial Broker
Working with an independent insurance broker like Conover Insurance will provide an experience that puts you and your unique needs first. Here are a few advantages of working with a commercial insurance broker:
- More Impartial Guidance – Choosing an insurance program based on price alone is not a wise approach; you need to have adequate coverage as well. A big advantage of partnering with a commercial insurance broker is that you can trust them to provide unbiased information and objective advice.
- Brokers Can Better Help Mitigate Risk - Choosing insurance coverage for a growing business is about more than just the cost of premiums. It’s also about balancing what you need to help minimize your overall costs with proactive risk management resources. When business owners are not informed on exposures that can negatively impact their company, they can be blindsided by things like compliance issues, operational activities, and even reputational risks. Commercial insurance brokers will often work on behalf of their clients to identify any risks that could harm their business.
- Access to More Options – We touched on this earlier, but it bears repeating: Independent insurance brokers work with many different insurers, which means they tend to have more insurance coverage options available to their customers.
How Conover Goes the Extra Mile for Our Clients
At Conover, we check all of the commercial broker boxes mentioned above. We also strive to provide our clients with exceptional service and guidance to ensure their needs are being met. Here’s how we deliver that top-notch experience to businesses just like yours:
- Access to Experts – By combining the ability to offer numerous carriers with an expert broker, you’ll always have better access to the right solution for you. Different coverage options in the hands of Conover experts allow them to be creative in building insurance solutions that fit the uniqueness of your particular business. Conover is a one-stop-shop for your business. We have experts to help with Employee Benefits, Life Insurance, Business Planning, Retirement Strategies, Taxes, and Wealth Management.
- Your Needs Are Better Met – Most people don’t like to change their insurance broker. Because you are working with one broker who can offer a variety of coverage, you can switch carriers if needed without having to change the insurance broker.
- You Have a Broker Who Gets to Know You – An independent insurance broker doesn’t work for a specific insurance company. They work for you to find the right insurance coverage for your business. They will strive to get to know you and assess your needs based on your situation, type of business, and goals to provide you with a more personalized insurance experience.
- Direct Line of Communication – Your insurance broker will likely develop a good understanding of your business needs and research products that fit your scenario. They are less of a salesperson and more of an unbiased educator, informing you of your options. The relationship between your insurance broker and you will be one of respect and direct communication.
Can’t I Just Explore All My Options on My Own?
Of course, you can explore your options in the insurance industry on your own. Using a brokerage isn’t necessary for all business owners. However, it takes a lot of time and knowledge to find and choose the right insurance with the right coverage,limits and deductibles for your business, whether you are a startup or have been in business for years. This is time that would be better focused on running your business. Independent insurance brokers work with a variety of insurers; they will be your advocate and seek the ideal conditions, benefits, and premiums for you. Because of this, they are more likely to find sustainable solutions for your needs and budget than you can find on your own.
Conover Will Do the Hard Work for You
If you feel that your business insurance is limited by the options your agent is offering you, it might be time to experience what it's like to partner with an independent broker like those at Conover Insurance. It’s nice having someone you can rely on to answer questions or concerns. That’s the type of service you can expect from us. Reach out to us to have one of our trusted brokers look over your current policy at no charge to you.