A commercial insurance broker is a professional who connects businesses with insurance companies. When a client purchases a business insurance policy through the broker, the insurance company pays the broker a commission for his or her work. In most cases, a commercial insurance broker will work at a brokerage employing many brokers, but he or she can also be an independent commercial insurance agent.
The commercial insurance broker does more than simply find a policy that fits the needs of a business. The job involves assessing the needs of a business and then finding several options that may fit those needs. The business insurance broker must be sure the policies offered are good fits for the risks the business faces. They must also find the best price on a policy offering the best coverage.
Insurance jobs like that of commercial insurance broker combine many skills into one occupation. The broker must act as a salesperson, forming a strong relationship with the client. In addition, the broker works like an underwriter, assessing the risk to determine the best market to find a policy.
The broker’s relationship with the insurance company is different from an agent. An insurance agent often has a contract with the insurance company to sell insurance. This makes the agent a representative of the insurance company, selling insurance on the company’s behalf. A broker does not have a contract with the insurance company. The broker represents the client, bringing the business to the insurance company, rather than bringing an insurance policy to the customer.
Because of the nuanced difference between an agent and a broker, the broker must take great care. The broker may be privileged to information that could harm the client’s chances of purchasing insurance. He or she must ensure the insurance companies have all the information they need to make a good decision about risk, while doing his or her best to ensure the client is able to secure the most affordable and comprehensive policy.
When brokering business insurance, it is vital that the professional understands the business of the client and the business insurance products available at each of the insurance companies the broker works with. Should the broker overlook risks that the client should have covered, the broker may be responsible for the uncovered loss. While it is ultimately the responsibility of the client to be sure the business purchases the right insurance, the business will rely on the advice of the broker when buying insurance.