It is with mixed feelings that a business owner or employee opens up the doors to quoting insurance brokers. On one hand you feel important and on the other hand, if you choose based on price and flashy style, the person ends up moving on or is never around when you call.
Your broker typically stops calling you after about 3-5 years. They don’t even come out to deliver the insurance policies – it goes in the mail (this doesn’t include accounts less than $4,000 in premium – those are generally mailed out). This dynamic is further re-enforced by the aging population. Older brokers are sitting on their books of business and letting the customer service reps renew the policies yearly!
You wouldn’t give your clients that kind of service, would you?
When buying insurance, you have to ask yourself, “What does my client expect of me?” I think I can reasonably assume that you offer your clients a mission statement about service and/or quality of your products and preach the mantra that they get a quality product or service and a reasonable but not the cheapest cost.
So too should it be with your insurance broker. It is fantastic that a broker can get you the cheapest rate – Awesome, but what happens next year? What happens when the market turns around and the insurers are no longer writing your line of business?
How about when you know someone who works as an agent at a company that sells only their products? Yes, that person is a nice person and they gave you and awesomely cheap rate…but wait – what does that person know about distribution, international freight woes or how the impact of the high dollar has forced your business to import more than it manufactures? Are they simply a life, home & auto insurance agent whose company has some underwriters to come out and quote on the business?
Business insurance is a dynamic and adaptable product that must be reviewed annually (or semi-annually). The broker that you choose has to team up with you to manage your exposure to risks.
The Solution: Interview your broker. Forget about talking price – the broker you choose is going to try to get you the best and most reasonable rate they can. Talk to them, try to tell them your issues. Your ideal broker will be one that listens to you, that has at least some understanding of your business (or will at least try to learn about it). How is the person that you are interviewing different from the rest?
A long and stable relationship with your broker will provide you less stress than shopping around for another one every few years. Your trusted chosen broker understands that your cash flow is important to you but they also know the risks that your business is exposed to and will do their best to protect those exposures.
Ultimately you will get what you pay for but if you do it right once you will likely never have to worry about it again.