Companies need to be able to depend ontheir professional service partners toprovide them with the necessary protection to survive and thrive during challenges. A key member of every risk management team is the property/casualty insurancebroker.
“The broker is not only responsible for providing the right combination of insuranceprotection for company, customers, assetsand employees but is accountable for protecting the net worth of the company and itsowners,” says Griff Griffith, CPA, CIC, principal with Garrett/Mosier/Griffith/SistrunkInsurance Services.
Smart Business spoke with Griffith aboutwhat to look for in a superior broker and thetools to ensure accountability.
What should you look for in a broker?
A great insurance broker functions beyondthe traditional role of a broker and providesrisk management service. They should betechnically proficient someone who actually reads and understands the policy forms.Many brokers today function on their entertainment skills and don’t rely on technicalskills to get the job done.
The adept broker needs to understand yourbusiness and industry. The broker must alsoanalyze your particular exposures and evaluate how to control, transfer or assume thecorresponding risk.
There are many brokers who will promiseservice but never deliver. Brokers are alsocutting services today because they’re costly.The difference between a good broker and agreat one is someone who does not cut services but rather puts their service commitments in writing and into action.
How can a broker put those commitmentsinto writing and what should that include?
Service commitments need to be incorporated into every proposal and service meeting. They are not just pretty adornment for abrochure but a pledge to provide services:
- Exposure identification and analysis
- Insurance coverage design. You’re not just taking the prior year’s policy and replicating it but analyzing the present exposures and finding the best way to cover them.
- Strategic marketing of coverage. Instead of making the clients part of the marketing process and presenting them with various quotes, a lot of brokers come to their clients and say, ‘Here’s the best quote available, should we go ahead and bind coverage?’
- In-house claims management service that reduces insurance costs
- In-house loss control and safety management. Many companies do not have the need or resources for a safety director, but a full-service broker can provide some of these services for no additional fees. The result is a safer work environment and potential premium savings.
- Employee training and education. If brokers assist in educating employees on safety and insurance, the employees are more likely to buy in to your safety program and become partners in this process.
What documents, proposals and servicesshould a broker provide?
- In-person presentation of proposals. Too often, brokers take the lazy way out and fax over an insurance quote. Protecting your net worth merits an in-person discussion, not a last-minute telephone call or quick fax.
- Exposure synopsis and a full scope of coverage options
- Summary of all marketing efforts and insurance quotes
- Cost benefit comparisons of presented coverage options
- Historical exposure, premium and rate comparisons
- Summary of service and broker-facilitated cost reductions
Each year, approximately 90 days beforeyour renewal date, your broker needs topresent a plan for marketing your insuranceprogram. Beware of brokers who insist onkeeping the same coverage and carrier yearafter year without first surveying the marketto ensure that your company is receiving thebest combination of coverage and premiumfor your needs. If you choose to stay with thesame insurance company, you need to makesure it’s the best option for your company.
What is a broker service calendar?
A service calendar is potentially the mosteffective tool for ensuring broker accountability. It includes the list of broker servicespromised during the policy year. These services are prioritized with scheduled deadlinesand assigned personnel to ensure completion. This is a perpetual tool and is updatedregularly to ensure ongoing accountability.The calendar also serves as a broker reportcard at the end of each policy period.
Why should accountability be the focus ofbusiness-broker relationships today?
Accountability ensures that the brokerservices you are promised are the servicesyou are delivered. The result is the highestvalue of service attainable for your dollar. Asa broker becomes truly accountable, he orshe becomes an active member of your management team, without being on your payroll.An accountable insurance broker alsoenables your people to focus their time andresources on other business matters, whilehaving the confidence that your insuranceprogram is being professionally managed.
GRIFF GRIFFITH, CPA, CIC, is a principal with Garrett/Mosier/Griffith/Sistrunk Insurance Services. Reach him at (949) 559-3370 orGriffG@garrett-mosier.com.