Besides a broker for employee benefits, many small business owners will want a separate broker for property and casualty insurance. Unlike in employee benefits, it’s critically important to find a broker who specializes in your industry. The issues involving manufacturing are quite different from, say, those in retail and publishing.
Equally important, you want this broker to thoroughly understand the workers’ compensation market, which can be one of small business’s biggest headaches. Your workers’ compensation insurance broker should be knowledgeable about your state’s requirements and be able to apply that knowledge to your particular circumstances. They also need to have a close working relationship with the major workers’ comp carriers.
If one of your employees is injured on the job, your broker should do two things: First, they should help you through the complex and potentially frustrating process of filing a workers’ compensation insurance claim. If questions arise during the course of an injured employee’s treatment, the broker should answer them promptly or facilitate answers from the insurance company. Second, your broker should help you determine the cause of an accident and offer to help you find ways to prevent future injuries.
How do you go about finding this broker? Many of the same tips apply here that you used for finding your employee-benefits broker: Word-of-mouth referrals are the best. If that doesn’t work, check with your local chamber of commerce. Look under “Insurance” in the Yellow Pages or visit the Web site of your state’s insurance commissioner.
You also want a broker who is properly licensed and who has plenty of experience (at least five years). He or she should do a high volume of business and have access to the largest and best carriers. They should have a good support staff who can handle claims and give you the kind of customer support you want.
Interview your prospective brokers. Ask them how many carriers they represent and why they are recommending a particular carrier. You can also ask them how they are compensated and if they have any special commission deals with their recommended carriers.
Picking a Broker for Professional Liability
For professionals such as attorneys and accountants, it probably makes sense to find a broker who specializes in professional liability insurance. These brokers can make sure your practice is presented in the best possible light, ensuring you get the best policy for the lowest price. They can also assist you with claims and help you understand some of the complex issues common in this type of coverage.
Many of the same strategies mentioned above apply to finding a professional liability broker. In addition, James Budish, owner of Budish Insurance Services in Marin County, California, and a professional liability broker for attorneys, suggests checking with your state’s professional organization for referrals.
Once you have a list of brokers, ask them tough questions about the market, says Budish. For example, how long they have been placing this type of insurance and what they expect the market to do in the next 12 months to 24 months.
Budish recommends finding a broker who responds quickly and accurately to your questions, and will carefully review policy language, especially the exclusions section, to ensure that all areas of your practice are covered.