A international insurance broker explains why small businesses need to review their agents each year and how to do it.
Your insurance needs are pretty straightforward, so you might as well buy your policies from the guy down the block.
A topflight insurance agent can in fact contribute to your company's well-being, says Paul Gregory, vice-chairman of Willis Corroon, an international insurance brokerage in New York City. He suggests you run this annual checkup on your broker:
1. Are your company's premium rates increasing, without any significant history of losses? Sometimes industrywide trends necessitate increases, but you should demand a good rationale. If there isn't one, switch insurers -- which your broker should have advised already.
2. Is your broker unwilling to comparison shop? Brokers should conduct at least a basic investigation of the marketplace every two years. A broker who tells you to stay with the same insurer indefinitely probably lacks the right contacts.
3. Has your broker ever suggested a "conceptual competition"? You may invite other brokers and insurers to analyze your insurance needs to see if they can come up with new, less expensive ways to provide coverage. Gregory recommends a "conceptual" every three to five years.
4. Are new "conditions" explored as your revenues increase? The last thing a growing company needs is a broker who renews your policy according to the status quo. Brokers who are truly aggressive about controlling costs constantly explore new "conditions," such as bigger deductibles or payment caps.
5. If you're expanding internationally, does your broker have the right overseas contacts to help you? Few small brokerages belong to international insurance networks. So, says Gregory, "grill your broker on his or her selection criteria and on the credentials of any broker who will handle your overseas business."