A Great Broker’s Job Is To Be Your Outsourced Risk Manager
LIZ MOORE
Insurance can be difficult to navigate. Regulation and size of the industry makes it difficult for the individual buyer to know where to start. You know that operating your business incurs risk. However, the term ‘risk’ is broad. Without analyzing and considering all your unique risks, a subpar policy can leave your business vulnerable. Instead of going directly to an insurance company, working with a broker is an asset in evaluating and negotiating the policies on your behalf.
In this blog, we’ll discuss three different topics that every startup should think about when assessing the value of a broker. As a startup your day-to-day is busy, the last thing you want is to over pay for insurance that leaves you under covered. A broker with the following 3 qualities will ensure that does not happen.
The Anti-Direct-To-Consumer
Insurance is not a one-size-fits all solution. While there are a lot of offers for exactly that, what that really means is that your policies aren’t tailored to your business. It puts the buyer in the position of doing the broker’s job and evaluating insurance policies themselves – but do you know what to look for? With promises to save time and money, many off-the-shelf, direct products are diluting coverage, excluding major areas of concern for many businesses, and often aren’t any more cost effective than working with a broker.
Relationships & Leverage
Relationships play a major role in the success of a broker, and ultimately the quality of your insurance program. Insurance is very much a relationship business, and isn’t as transactional as it may appear to those outside the industry. A great broker has great relationships not just with their clients, but also with their underwriters, markets, and wholesale brokers. And the better this relationship is, the better the terms are, as it results in underwriters putting their best foot forward when quoting, providing broad coverage and competitive pricing.
Niche & Expertise
So how do you find a great insurance broker? There are a number of things you can look for, and while you may not have insight into what type of relationships they may have with their markets, you can start by looking for niche and expertise. A great broker is going to focus in a few key areas, and should be extremely knowledgeable about those areas. The more specifically one works in a niche, the more business they do in that area and therefore, has solid relationships. A great broker will allow you to confidently answer “yes” to any of these questions.
- Does your broker truly understand your business?
- Do they fully understand the risks you face?
- Do they understand how each policy will respond to various loss scenarios you might face?
- Are they reading your insurance policy?
- Do they catch problematic exclusions buried in the policy wording or added endorsement?
- Do they have the knowledge, relationships, leverage to get those exclusions removed?
- Do they help you plan for future growth in a way that makes you more knowledgeable about your own risk?
So Why Is It Critical To Hire A Broker?
Your job is running your business, a great broker’s job is to be your outsourced risk manager, a partner that takes the insurance matters into their hands and helps guide you. They are your advocate, not only at claims time when you are buried with managing your business during a crisis, but also at renewal when rates increase, or you have questions about what coverage you need now, soon, and down the line, and certainly when you’re having trouble getting valuable coverage or avoiding material exclusions.
Bottom line: your insurance policies will be as good as your broker is, and they’re not all created equally, so choose one that is knowledgeable in the industry you’re in, can answer technical and specific questions about insurance, and helps guide you as if they were you.
If you are in the market for insurance and are unsure where to start, reach out for a free consultation at danielle @ ameliarisk.com
