What are the key attributes of a good insurance broker?
Brokers differ greatly, so you really must understand your company’s needs and make sure that you’ve selected a partner who can properly address all of your needs. A company’s needs from a broker can differ greatly based on things such as industry, size and location. However, another important and sometimes overlooked consideration is the way your company handles the risk and insurance function.
For example, if you are a large, multinational company that has a risk manager, it will be critical for you to have a broker who has a worldwide network to ensure that you have coverage placed properly in all of the countries where you do business. In a smaller or medium-sized organization, the purchase of insurance is typically done by the controller, treasurer or CFO. This function represents only a fraction of this person’s overall job duties. Many times the focus is placed solely on obtaining the lowest cost. This can be a detrimental mistake. If your broker does not have the expertise to understand your company’s risk profile and the market clout to ensure that you obtain the right coverage, you could be leaving your organization exposed to unintended risk that, in some cases, might lead to the company having to close its doors.
In addition, a broker should have claims expertise for all of the different lines of coverage that it places. If you have a large property or employment practices loss, the relationship with the insurance company can change, and you need to be sure that you have selected a broker partner that has the expertise to get your claim handled in a timely and fair manner.
How can a business make sure that its relationship with its insurance broker stays strong over time?
As with any relationship, communication is the key. Your insurance broker needs to truly partner with you. This means having a deep understanding of your firm’s short- and long-term goals so it can anticipate future risks to your firm and direct you to ways to mitigate or transfer those risks.
It is also important to make sure that your broker has adequate bench strength. No matter how good your primary contact is, you should take the time to meet office leadership, as well as other members of the team. Otherwise, the result is often service dissatisfaction if your primary contact leaves.
Finally, be sure that, at least annually, you are having stewardship meetings that include more senior individuals from your company, as well as from the broker, to make sure that both firms have a clear understanding of what has been accomplished to date and that a clear plan is set going forward.
Selecting the right broker for your business takes some time and effort, but having the right partner when a loss occurs and coverage is called upon can be critical to your company’s success.
John L. Boss III is executive vice president with Aon Risk Solutions’ Health and Benefits Practice. Reach him at (317) 237-2411 or [email protected].
