Services Your Agent Should Provide
Insurance agents and brokers earn commissions on the premiums you pay for insurance policies. What services can you reasonably expect your agent or broker to provide in return for those commissions? This article will answer that question. For the purposes of this discussion, any reference to agent includes a broker.
Knows Your Business
Your agent should understand your business. He or she needs to know what your company does, how it operates, where it is located and other essential details. Your agent is not a mind reader. You know more about your business than anyone else. Your agent must rely on you to be forthcoming with information. Be sure to tell your agent if your business has any unique risks, such as a sideline operation or an affiliation with another business.
Conduct a Risk Assessment
Once your agent understands your business he or she should help you assess your risks. Ask your agent what types of losses are typically incurred by businesses like yours and what you can do to prevent them. Your agent should help you review your options for managing risk. For instance, your agent may suggest that you set up a loss control program, buy an insurance policy, utilize self-insurance, and/or transfer risk to someone else via an indemnity agreement.
Analyze Your Coverage Needs
Once your agent has a basic understanding of your company's risk, he or she should analyze your coverage needs. Some types of insurance, such as auto liability and workers compensation, are compulsory. Others are not mandated by law but are crucial nonetheless. An example is general liability insurance. Some types of insurance (like auto physical damage coverage) are valuable but not always essential. To make the most of your insurance budget ask your agent to rank the coverages he or she recommends based on their relative benefit to your business.
Shop for Coverage
The next step is to submit applications on your behalf to one or more insurance companies. If you are using an independent agent he or she should be familiar with the products offered by the insurers the agency represents. Your agent should also know which of these products will best suit your needs. Preferably, your agent will obtain quotes from several insurers. However, this may not be possible if your business is risky, has unusual characteristics or a poor loss history. In that event, your agent may ask a surplus lines broker to obtain quotes from one or more non-admitted insurers.
Review Quotes and Select the Best Option
Once your agent has received quotes from the insurers he or she should help you compare them. It is your agent's responsibility to ensure that the quoted premiums include the coverages you requested. If any of the premiums are too high or the coverage is lacking, your agent should try to negotiate a better deal on your behalf. Once the quotes have been finalized your agent should help you select the policy that best suits your needs.
Monitor Your Coverage
Your agent's job doesn't end once you have purchased a policy. Your business is likely to grow and change over time and your insurance needs to adapt to those changes. Your agent should contact you at least once a year for a renewal update. If your insurance has been written by the same insurer for several years, ask your agent about marketing your business to other insurers. The marketplace may have changed since your coverage was written and better options may be available.
Help With Claims
If your company sustains a loss, your agent should provide guidance in completing claim forms and submitting them to the insurer. The agent should monitor the claim to ensure it is processed promptly. If your claim payment is delayed or denied, perhaps due to missing or inaccurate information, your agent can talk to the adjuster on your behalf to speed up the payment process. Once your claim has been paid, your agent can help you determine whether the payment amount is fair and reasonable.
Your agent should be available to answer questions related to your insurance coverage. For example, if you intend to travel outside the U.S. on business your agent should be able to tell you whether your existing coverage will apply in a foreign country. Be sure to contact your agent right away if your business takes on a new risk (such as buying a new building) or undergoes a significant change.
Serve as Your Advocate
Your agent should serve as your advocate in dealing with insurers on a variety of issues (not just claims). He or she should work with insurance company employees to resolve problems on your behalf. For example, suppose an underwriter wants to non-renew your property policy because you have sustained several losses. Your agent should work with the underwriter to negotiate a less drastic solution, such as a larger deductible.