This post will help you identify if you have outgrown your current broker.
If your company has recently raised funding, it’s a great time to check in with your broker and make sure your needs are being met. Investors put money into companies with the expectation that they will see a return on their investment. Along with this expectation is the expectation that the funds will be prudently used and carefully managed. These expectations increase during each additional round of funding. A smaller broker that does not frequently work with the investment community will likely not be as familiar with their expectations. One of these expectations is to have a strong risk management program to prevent loss from happening. Another is having the correct tools in place so that should there be a loss, the risk is mitigated or transferred altogether. If you don’t feel like you have these priorities taken care of, you’ve outgrown your broker.
If your company carries specialty products, it’s time to make sure your risk management protects them. Nearly all insurance brokers can assist with placing some Auto, General Liability, Property, and Workers Compensation insurance. But as a company grows, so do its risks. While these common policies may be all that a company initially needed, the company may now be to a point that they start considering specialty insurance policies. Policies such as Cargo or Transit, Directors and Officers, Employment Practices Liability, Cyber coverage, Professional Liability, Trade Credit Insurance, etc. A smaller broker that does not frequently work with these specialty policies will likely not be as familiar with their terms or how they respond in claim situations.
Variety of Markets
Insurance brokerages are like other businesses in that some are more successful than others. Larger more successful brokerages will often have more insurance markets (i.e., insurance companies) available to offer their clients than would a smaller broker. This is because the insurance carriers want to partner with the brokers that write the most business. A smaller broker will likely not write as much business as a larger broker and therefore probably not have the carrier connections, or options for their clients, as would a larger broker. Make sure you are getting a wide array of options when it comes to which policies you can put in place.
Are you getting poor service from your insurance broker? Are your requests being actioned slowly or being missed altogether? Does it feel like your broker is exhausting all their resources just on your account? This may be happening because your account is too complex for your current broker. You’ve probably outgrown your broker and should move on. A larger broker that is responsive and helpful is what you need. It is important to find a broker who is just as passionate about your business as you are.
Mergers & Acquisitions Activity – Is your company about to be sold or are you looking for ways to make your company more attractive to potential buyers? According to the Insurance Journal, the COVID-19 pandemic has created challenges for many businesses across the globe, including the insurance industry. But so far, the insurance broker merger and acquisition (M&A) market has remained active even as the pandemic continues to unfold.
Are you about to purchase another company or are you looking for ways to hedge the risk associate with acquiring a new company? If so a larger broker, familiar with M&A transactions and requirements may be just what you need. It is critical that your insurance broker knows the ins and outs of these types of deals.
How to make a change
Your existing broker may be great with your personal home and auto coverage, but if that’s the extent of their knowledge, you have most likely outgrown your insurance broker. They may have been great while your company was in startup mode, but if you have big dreams for your company, it is important that your insurance broker is capable of supporting you every step of the way. If you need guidance on how to change insurance brokers, you can read a blog post about it here.