Selecting an Insurance Representative:

Once you are ready to purchase insurance for your business, you will need to find an insurance representative to assist you. Instead of blindly picking one out of the phone book, it is important to select an insurance representative that is qualified to meet all of your needs, answer your questions and provide you with the best price possible.

There are three main types of insurance agents or representatives. It is important to know how each type of agent works before making your selection.

Independent Agents

This type of insurance representative typically works for a variety of different insurance companies. This type of agent is a business owner, just like you, that will contract with different insurance companies for their clients. An independent agent is paid by commission, and in essence, is representing an insurance company and not you.

An independent agent is usually quite knowledgeable in the many facets of insurance and may be very helpful to business owners that are just starting out. You can normally get an insurance policy at a better rate by going through an independent agent. Since they are not bound to one company, they are free to find you the best deal.

Since an independent agent does work on commission, they are typically quite adept at customer service. You are keeping food on their table and this incentive will drive an independent agent to keep you happy.

Captive or Direct Agents

A captive or direct agent is an insurance representative that works for one company. These agents are also paid by commission but will not have access to many different types of plans or rates. Since they are tied to one, single company, the ability to comparison shop for the best rate is greatly diminished.

Business owner's with complex insurance needs can be well served by a captive agent. Since these agents only work for one company, they will have an excellent grasp on the services and plans offered by the insurance company, and can assist you in meeting all of your insurance needs.

Brokers

This type of insurance agent will be the most expensive to deal with. They will typically charge you to get your insurance plan together. However, since they do not work for a specific company, they can find very good deals on insurance policies, which can save you money over time.

Since you are paying a broker, they are representing you, and not an insurance company, which puts many business owners at ease. You know that they will have your best interests in mind while finding suitable policies.

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