Insurance broker

An insurance broker is an intermediary between small business owners and insurance products from dozens of insurers.

After learning facts about your business, brokers apply their extensive knowledge of business risk management, small business insurance policies and different insurance companies to help you find a provider well-suited to your company’s risk and budget.

Unlike insurance agents who represent a single insurance company, brokers provide coverage from multiple insurers.

Insurance brokers typically work in insurance agencies, either as an employee or as an independent contractor. An insurance broker may also operate their own agency and have a sales and service team to support them.

Compensated via commission, the more insurance they sell, the more money they make. Unlike agents, some insurance brokers may charge fees for insurance advice or helping clients file claims. State insurance departments regulate broker fees.

What does an insurance broker do?

In some states, insurance brokers operate as fiduciaries, meaning they must put their clients’ needs first.

Here are some of the tasks brokers handle for their small business clients:

• Explaining how small business insurance works.
• Evaluating your business risks and how to mitigate them with insurance.
• Prioritizing which insurance to buy first.
• Shopping a client’s insurance needs to multiple insurance companies.
• Helping small business clients choose the right insurance.
• Submitting client applications to insurance companies.
• Help filing a claim. 
• Reviewing client business insurance needs periodically.

When do you need an insurance broker?

The industry expertise of an insurance broker can be helpful when your company has large or unusual business risks.

Because brokers typically have relationships with many different insurance companies, they can sometimes bring you a more unique and specialized coverage package.

What are the different types of insurance brokers?

There are three types of insurance brokers:

1. Retail brokers work directly with business owners to assess risks and provide insurance protection.
2. Wholesale brokers sell more sophisticated forms of insurance to retail brokers or agents. They typically have little to no contact with small business owners.
3. Surplus lines brokers provide special insurance policies to businesses with substantial risks that standard insurance companies won’t touch.

How are insurance brokers regulated?

State insurance departments license insurance brokers. To earn a license, brokers must:

• Complete pre-licensing training, either independently or from a commercial school.
• Pass a broker licensing exam.
• Earn continuing education credits every year or two as prescribed by the state where they work.

Most states let you verify a broker’s license number and disciplinary status on their website.

How NEXT helps small business owners

NEXT sells through insurance brokers and licensed insurance agents, but many of our small business clients love the convenience of buying coverage online.

NEXT is easy and always available. We give you 24/7 access to your plan and your policies to help you manage your coverage on your schedule.

Start a quote, customize your options and access your proof of insurance in about 10 minutes.

Get a free instant quote with NEXT.