Business Insurance
Above and beyond
How to select an insurance broker
By Marcia Passos Duffy
Smart Business San Diego | February 2008
Rob Kempa
Commercial insurance broker
Westland Insurance Brokers
Many business owners use an insurance broker for buying commercial
insurance. While business owners may feel secure knowing that their business is covered, the litmus test of a policy’s
adequacy is when a claim is filed.
But how does a business owner tell one
insurance broker’s services from the next?
They may end up basing their decisions
exclusively on price or an attractive package
deal.
“Insurance is often treated like a commodity, but selecting an insurance broker
should be done with the same care as selecting an accountant, banker or attorney,” says
Rob Kempa, a commercial insurance broker
with Westland Insurance Brokers with
offices in Irvine, San Diego and Temecula.
Smart Business spoke with Kempa
about tips on how a business owner can
determine if an insurance broker is good fit
for his or her business.
What are the hallmarks of a good insurance
broker?
At the very least, an insurance broker
should assess your risks, tailor an insurance program that will protect those risks
and provide recommendations to improve
the insurance program to transfer the risk
via risk management processes that
include buying an insurance policy.
Insurance brokers that go above and
beyond these basics are a true asset to a
business owner.
What are some of the things that make an
insurance broker stand out from the pack?
A good insurance broker will help business owners consider risks that they would
not normally consider and help them foresee problems that could jeopardize the
company in the future.
Clients ought to expect that an insurance
broker behave like an attorney, a banker or
another trusted adviser rather than simply
a salesperson.
A good insurance broker is often very
involved in advising clients on the ever-changing landscape of insurance trends,
policy and coverage changes. A good broker should also make sure that clients are in compliance with ever-changing laws and
regulations, so that if a business is inspected everything will be in order. The broker
can achieve this by hosting seminars and
workshops within the client’s company
about pressing issues, such as compliance
with OSHA and reviewing a company’s
safety programs.
A good insurance broker can also communicate with clients through e-mail or a
newsletter about insurance issues that can
affect businesses.
What are some red flags that a business
owner should be aware of when selecting an
insurance broker?
Beware of insurance brokers that emphasize only price and savings. While you may
save money in the short-term, the premium
savings can be eradicated if there is ever a
claim not covered due to a gap in coverage.
Also, be wary of brokers who do not have
experience insuring companies that are
similar to yours. Brokers — or the insurance companies they represent — need to
understand the industry that you are in if
they are to completely understand all the risks that need to be covered.
Do not take a cookie-cutter proposal.
Make sure that the broker has analyzed
your business and is giving you custom-designed services.
Lastly, make sure that the insurance brokerage firm you select has adequate
resources to properly manage your account.
Make sure the broker has a highly qualified
staff to support your servicing needs. The
broker should represent many high-quality
carriers that can support your company in
the ever-changing marketplace.
What are some tips when seeking a good
insurance broker?
Get recommendations from your other
trusted advisers, your business associates,
friends or your chamber of commerce.
Interview at least two to three prospective
brokers, similar to the way you would interview a prospective employee. Research the
history of the broker.
Make sure the insurance broker has experience insuring a company in your industry.
How long has he or she been a broker?
Make sure that the broker is not acting as
just a salesperson, but takes on the responsibility of becoming your risk manager and
insurance adviser.
Do not make your decision based on
price alone, but ask the broker to provide a
line-by-line assessment of the coverage so
that you can easily review and compare
with other brokers.
Ask for references and a list of clients,
and call them.
Make sure the carriers the broker is presenting are A-rated AM Best carriers. This
can easily be checked by visiting
www.ambest.com.
Make sure the broker can provide full
brokerage services — not only property
and casualty insurance but also employee
benefit, personal lines and safety management. By selecting a full-service broker,
this will give you the convenience of working with one firm rather than many.
ROB KEMPA is a commercial insurance broker with Westland Insurance Brokers (www.westlandib.com), a full-service commercial and
group insurance company with offices in Irvine, San Diego and Temecula. Reach Kempa at rkempa@westlandib.com or (619) 584-6400,
x3216.
