Is it better to have multiple brokers or to pick one broker to help with risk management? As businesses grow, many of them add more brokers to the mix. In this article, we will show you why it’s beneficial to consolidate everything with one broker. In most cases, we recommend that companies select just one broker for all their insurance needs.
A good broker does it all
A company’s insurance program consists of multiple policies. Policies in a good program will complement each other so that there are no gaps in coverage. They will also be written so that there is no duplication of coverage. If there is duplication, there is often confusion as to which policy will respond first in the event of a claim. Plus, you are paying the extra premium for something that you do not need. Coverage gaps and duplication of coverage are common pitfalls when multiple insurance brokers are involved because brokers communicate with the client and not with other brokers.
A common example is when a client has an umbrella policy, but it is not sitting in excess of all their eligible underlying policies because the broker that set up the umbrella is unaware of the other policies. Umbrella policies are a type of personal liability insurance that covers claims in excess of regular homeowners, auto, or watercraft policy coverage.
A good broker will help their client with its risk management needs and not simply write policies to check a box. They will understand what your company has been through in the past and where they are going in the future. As risk managers, they will want to understand all the business risks, to ensure that stakeholders are safe, the finances are protected and that their reputation remains intact. By seeing the big picture, they will develop a program of policies that are synced together so that should something happen, there would be no surprises with coverage.
Get the best quote and price
Most insurance brokers have access to a lot of the same major insurance carriers (e.g., The Hartford, Travelers, Liberty Mutual, etc.). What insurance buyers do not always understand is that each carrier will only issue one policy quote to each insured or potential insured. In other words, Travelers will not issue a quote for a company through Broker A and a different quote for the same company through Broker B. Rather, Travelers would block Broker B from receiving a quote for the company. This becomes an issue if an insurance buyer asks several brokers to provide quotes on the same policy for their company. It is best if a broker has access to all their available insurance markets. This allows the broker to get an apples-to-apples coverage comparison, making sure that limits and any additional carrier services are accurately factored in. It also allows for the broker to better negotiate terms by letting all of the insurance carriers compete for the insured’s business.
A good broker will meet and communicate often with their client. They will strategize early before the policy renewal dates. They will keep you posted on their marketing efforts and will help you make the best purchasing decisions.
An outsourced risk management team
If multiple insurance brokers are involved, it can be confusing for an insured to remember who they need to reach out to with a coverage question. It can also be time consuming when making multiple requests for things like certificates of insurance. It is far more convenient when you are working with one team for all your insurance needs.
When it comes to insurance, trust is of the utmost importance. You want to know that someone has your back. And that, that someone is competent, experienced, and passionate about what they do. At Diversified we encourage our clients to think of us as their outsourced risk management team. A team that can help with the day-to-day requests but also is there for support during unfortunate claim situations. We understand that strong relationships are forged through good times and bad; cheering for you when the spotlight is on and advocating for you when you need it most.
A good broker is one that make your life easier and is someone you can trust.
Pick one broker
Having one good broker is better than multiple brokers. A good broker will have a strong team to support you, one that sees the big picture, that makes the purchasing process clear and simple, that makes the insurance routines more convenient and ultimately earns your trust.
If you want more information about using Diversified as your broker, go here.