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.
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?
- 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. This article was originally posted at https://blog.reduceyourworkerscomp.com/2020/09/key-questions-to-ask-when-selecting-an-insurance-broker/