Selecting an insurance broker is an important decision for a company.
The insurance broker acts in a fiduciary role for your company. Your company trusts the broker with protecting your financial assets through selecting and obtaining your insurance. While the broker acts on your behalf, their actions are subject to your control and consent.
This fiduciary responsibility of the broker goes beyond just finding the best price for your company’s insurance. They also have the fiduciary obligation to recommend the best financial protection of your assets for both the short and long term. The insurance broker’s duties and obligations are to put your company’s best interests first. A good broker will take the initiative to act to provide benefits to your company without the company having requested it.
To make sure your company selects the best insurance broker for its needs, it is important to interview any prospective brokers before finally selecting a broker. You need to make sure that the broker you choose is the one that best suits your company’s needs, which isn’t necessarily the biggest firm or the one with the most advertising.
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Key Questions to Ask
First, you want to know how the insurance broker will make your program more cost-effective. Some brokers have cost containment experts to provide suggestions and support. Ask the broker how they will:
- Review and analyze your existing coverage?
- Structure your company’s program?
- Market your company to insurance carriers?
- Enhance your company’s insurance coverage and reduce costs to make your program more cost-effective?
- Do they have incentive-based options for their fees?
Second, you will want to know what type of customer service your company will receive from the broker. As the broker:
- Who is the team that will service your account? Are they willing to meet with your team to brainstorm and implement ideas?
- How easy is it to reach their team by phone?
- Are they easily accessible via email?
- Is their website user friendly? Do they have lots of educational resources available for clients?
- What experience they have in your industry? Do they have industry groups for your industry?
- Do they have RMIS (Risk Management Information Systems) capabilities?
- If your company has operations outside the United States do they have experience in those parts of the world?
- What is their timeline for all the activities they propose?
- How will they ease the transition from your present to any new carriers? Do they have experience with your existing carriers
Next, you will want to know what the broker’s capabilities are in the following areas:
- Claim Advocacy: Do they have claim specialists to help in difficult situations?
- Claim Reviews: What are their procedures for claim closure and best practice reviews?
- Loss Control: Do they have specialists to help develop strategic plans in areas such as:
o Repetitive motion injuries
o Loss trend analysis
o Air quality programs,
o Lock-out/ tag-out expertise,
o Safety consulting on OSHA requirements and safety cultures
- Post-Loss Cost Containment: What systems and procedures do they have to reduce workers’ comp costs after an employee is injured?
Author Michael Stack, CEO Amaxx LLC. He is an expert in workers’ compensation cost containment systems and helps employers reduce their workers’ comp costs by 20% to 50%. He works as a consultant to large and mid-market clients, is a co-author of Your Ultimate Guide To Mastering Workers Comp Costs, a comprehensive step-by-step manual of cost containment strategies based on hands-on field experience, and is the founder & lead trainer of Amaxx Workers’ Comp Training Center , which offers the Certified Master of Workers’ Compensation national designation.
Workers’ Comp Roundup Blog: https://blog.reduceyourworkerscomp.com/
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Thank you so much for your tips on how to select the right insurance broker for your business. I agree with you that it would be smart to find out how much experience they have with other businesses in your industry. I would also suggest that you ask other business owners that you trust for referrals of good insurance brokers.
My company is always looking for new employees, so it is interesting to learn what to look for when selecting an insurance broker. It is interesting how you point out the importance of finding someone who is easy to reach by phone. I imagine that someone who is easy to reach by phone will also be able to reach in other ways. That would show me that they are easy to communicate with. Thanks for sharing this!
Thank you for leaving the key questions on here because It helps to know what kind of questions to ask. I know that it can be really difficult to figure out your first time because you don’t know what to say or do. I know a few people that also would bet themselves in a bad deal if they didn’t’ know what kind of questions to ask.