If you own a business, you likely have to go through the process of purchasing insurance for your employees. It’s wise to get quotes from multiple insurers to find the best price. And while almost anyone can compare insurance rates online, having an insurance broker walk you through the process can help you explore your available options.
This article will explain more about the role of an insurance broker and whether you need one for your business.
What is an insurance broker?
An insurance broker acts as a middleman between you and your insurer. They tend to have an extensive background and insurance know-how to find the best policy that suits your business and employees for a reasonable price. While insurance brokers can save you time and money in the long run, you will likely have to pay a broker fee for their service. Even with the fee, you may spend less overall.
When to use an insurance broker for your business
While an insurance broker may be able to save you money, it isn’t necessary for everyone. How you buy insurance for your employees is your choice, but brokers are usually the best people suited to handle complex insurance needs. Here are some situations when having an insurance broker might benefit you:
- Having multiple cars or homes
- Wanting to thoroughly understand the ins and outs of your insurance policy, including exclusions and limits
- Needing insurance for your business
- Wanting to shop around with multiple insurers without investing time or energy
- Wanting a personal relationship with someone invested in knowing your business, background, and coverage needs
How are insurance brokers paid?
It’s essential to understand how brokers are paid so that you can find one who cares more about helping you find the right policy for your business than making money. Brokers can make money through a commission or broker fee. They may charge both or only a commission. In addition, most states require brokers to disclose their commission rates and fees upfront before you start working with them.
Insurance brokers vs. independent agents
Insurance brokers can easily be confused with independent insurance agents. That’s because they both work with multiple companies to earn a commission. However, independent agents make all their income entirely from commissions.
Because insurance brokers and agents make more money when you buy more coverage, they are incentivized to upsell. But at the same time, they work to provide you with quality customer service to keep your business in the long run.
Independent agents represent insurance companies, not the people buying the policies, while brokers represent the buyer. Agents can bind a policy or offer temporary coverage while a policy is in the process of being finalized and issued. On the other hand, a broker will need to work with an insurance agent to bind the policy.
Additionally, brokers tend to work with more than one insurance company and are not limited to only selling certain policies. This means you can receive a broader range of options with an insurance broker than an agent to find the coverage you want at the price that works for you.
Get in touch with VillaNOVA Insurance Partners!
There are many benefits to using an insurance broker for your business. If you're looking for peace of mind, expert advice, or cost savings, hiring an outside firm is a great option to explore. At VillaNOVA Insurance Partners, we offer comprehensive accounting services for businesses in Wayne, PA and the surrounding area. Contact us today to learn more.