Forget your captive agent. Here’s why an independent broker is better for complex risks.
The Agent and the One-Size-Fits-All Answer
My business had a unique, complex risk profile. I was with a “captive” agent, who could only sell products from the one single insurance company he worked for. When I asked for a specialized policy, he just tried to fit me into one of his standard boxes. It was a terrible fit. I switched to an independent broker. She wasn’t tied to any one company. She had access to dozens of specialty carriers and was able to find a policy that was tailor-made for my business. A captive agent sells you what they have; an independent broker finds you what you need.
Stop chasing a broker who promises the lowest price. Chase one with market clout instead.
The Price vs. The Power
As a small business owner, I was always chasing the broker who could promise me the lowest premium. I was focused on the wrong thing. After a series of frustrating renewals, I switched to a larger, more influential brokerage firm. They didn’t promise the lowest price; they promised “market clout.” When they took my business to the underwriters, their firm’s reputation and volume of business gave them leverage. They secured broader coverage and better terms than my “low-price” broker ever could. I learned that a powerful advocate is worth more than a cheap price.
The hidden truth about broker commissions and contingent payments that they won’t admit.
The Commission and the Conflict
You think your insurance broker works for you. The hidden truth is that their compensation structure can create a massive conflict of interest. They are paid a commission by the insurance company, not by you. Worse, many brokers receive “contingent” payments or bonuses from carriers for placing a large volume of profitable business with them. This means your broker may have a direct financial incentive to place your business with a specific carrier, even if it’s not the best option for you. Their advice might be influenced by their own paycheck.
What nobody tells you about a Broker of Record letter and how to use it to your advantage.
The Letter and the Leverage
What nobody tells you is that a “Broker of Record” (BOR) letter is one of the most powerful tools a business owner has. If you are unhappy with your current broker, you don’t have to wait until renewal to make a change. You can sign a BOR letter at any time, immediately firing your old broker and appointing a new one to take over your existing policies. Savvy buyers use the threat of a BOR letter as leverage. It’s a way of telling your current broker, “Improve your service, or I will replace you tomorrow.”
I spent 20 years as a commercial insurance broker. Here’s what I learned about marketing a risk.
The Story and the Submission
As a broker, I learned that getting the best insurance for a client wasn’t about just filling out forms. It was about marketing. I had to become a storyteller. For a complex risk, I would create a detailed underwriting submission that went far beyond the basic application. It would tell the story of the business, highlighting its strengths, its management team, and its commitment to safety. A good submission doesn’t just present the risk; it frames it in the best possible light, making the underwriter want to write the policy.
Unpopular opinion: Your friendly local agent is not equipped to handle your growing business.
The Friend and the Failure to Scale
Your friendly local agent has insured your car and your first small office. You’re loyal. But as your business grows—adding employees, new products, and selling in new states—your risks are becoming more complex. Here’s the unpopular opinion: your friendly local agent is not equipped to handle that. They are a generalist. They don’t have the expertise or the market access for complex liability, cyber risks, or D&O insurance. Sticking with them out of loyalty is a disservice to the complex business you are trying to build.
90% of insurance agents don’t understand this about the surplus lines market.
The “No” and the Next Step
I needed a very specialized type of liability insurance for my business. My agent went to his standard carriers, and they all said “no.” He told me I was uninsurable. He was wrong. What he didn’t understand was the “surplus lines” market (also known as the “non-admitted” market). This is a separate marketplace of specialized insurers who are licensed to cover the unique, hard-to-place risks that standard companies won’t touch. My agent saw “no” as a dead end. A real specialist knows it’s just the first step to the surplus lines market.
This simple pre-renewal strategy meeting transformed our insurance outcomes.
The Meeting Before the Market
Our insurance renewal used to be a last-minute scramble. We changed one simple thing, and it transformed our results. Ninety days before our renewal, we now hold a mandatory “pre-renewal strategy meeting” with our broker. In this meeting, we don’t talk about price. We talk about our business goals for the next year, any new risks we see, and what we want our insurance program to accomplish. This gives our broker a clear mandate and plenty of time to go to the market with a professional, strategic approach, rather than just chasing a cheap quote at the last second.
You’re not getting bad quotes because of your risk profile. It’s because of your broker’s poor submission.
The Garbage In, Garbage Out Rule
You keep getting high-priced, lousy insurance quotes and you think it’s because your business is a “bad risk.” You’re probably wrong. The more likely reason is that your broker is submitting a lazy, incomplete application to the underwriters. I once saw a submission from a lazy broker that was just a one-page form with half the questions unanswered. The underwriter, having no real information, will always assume the worst and give a terrible quote. Garbage in, garbage out. A professional submission is the key to a professional quote.
Stop relying on your broker for claims help. Hire a claims consultant or public adjuster instead.
The Broker and the Blurred Line
When you have a major claim, your first call might be to your broker. They can be helpful, but you shouldn’t rely on them to manage the claim. Their role can be a conflict of interest. They have a relationship to maintain with the insurance carrier, and they are not licensed claims adjusters. For a complex or disputed claim, you need to hire your own advocate—either a claims consultant on an hourly basis or a public adjuster on a contingency fee. Their only job is to advocate for your best interest, with no other conflicting loyalties.
The uncomfortable truth about your agent’s E&O insurance.
The Agent’s Error and Your Uncovered Claim
Your insurance agent makes a mistake. They forget to add a critical coverage to your policy. You have a claim, and it’s denied because of their error. You think, “Great, I’ll just make a claim against my agent’s Errors & Omissions (E&O) insurance.” The uncomfortable truth is that this is an incredibly difficult, expensive, and lengthy process. You essentially have to sue your own agent for negligence. And even if you win, their E&O policy might have a high deductible or exclusions. It is a last, desperate resort, not an easy solution.
Why everything you know about finding a good agent is backwards.
The Relationship vs. The Results
Most people think finding a good agent is about finding someone they like and trust—a good relationship. This is backwards. You should be looking for a technical expert who can deliver measurable results. I don’t care if my broker is my friend. I care if they have the market clout to get me the best terms. I care if they have the expertise to find the gaps in my coverage. I care if they can show me how their work has improved my company’s risk profile. A good relationship is a bonus; proven, professional results are the only thing that matters.
I tried to use a call-center brokerage for my business insurance. It was a disaster.
The Call Center and the Clueless Agent
To save money, I moved my business insurance to a large, national call-center brokerage. It was a disaster. Every time I called, I got a different person who didn’t know me or my business. They were reading from a script and had no real expertise. When I had a complex question, they were clueless. I learned that for a business with real risks, you need a dedicated broker, a single point of contact who knows your business inside and out. The small savings from a call center is not worth the massive sacrifice in service and expertise.
Hot take: Most insurance agent designations are meaningless.
The Letters and the Lack of Real-World Skill
Your insurance agent’s business card is covered in a confusing alphabet soup of professional designations—CIC, CRM, CPCU. Hot take: for the most part, they are meaningless. Many of these designations are just the result of attending a few weekend seminars and passing a multiple-choice test. They do not guarantee that your agent has any real-world experience, market clout, or technical expertise in your specific industry. Don’t be impressed by the letters. Be impressed by their client list, their case studies, and their strategic advice.
Most business owners waste hours talking to multiple agents. Interview brokers instead.
The Quote and the Consultation
When shopping for insurance, most business owners call three different agents and ask them all for a “quote.” They waste hours repeating the same information. This is the wrong approach. You should not be shopping for a quote; you should be shopping for an advisor. Instead of asking for quotes, you should conduct formal interviews with three different, qualified brokers. Choose the one who demonstrates the most expertise and the best strategic plan. Then, hire them and let them go to the market to get you the quotes.
The 20-minute habit that replaced my fear of being underinsured by my agent.
The Email That Becomes an Endorsement
I used to have a vague fear that my agent wasn’t really getting me the coverage I needed. I started a 20-minute habit that has replaced that fear. After every single substantive conversation with my agent about my coverage, I send him a polite follow-up email. It says, “Dear John, this email is to confirm my request that you secure a policy that provides coverage for…” This email creates a documented, time-stamped record of my specific instructions. If he fails to follow them, that email becomes the basis for an Errors & Omissions claim against him.
Your high premium isn’t caused by the market. It’s your broker’s lack of carrier access.
The Market and the Missing Options
Your broker tells you, “The market is hard right now, so your premium is going up.” This might be true, but it’s often an excuse. The real reason for your high premium is often your broker’s own limited access to the market. A smaller, local agent might only have direct appointments with a handful of standard insurance carriers. A larger, more specialized broker might have access to dozens of specialty carriers and wholesale markets that your current agent has never even heard of. Your premium isn’t high because of the market; it’s high because you’re not seeing all the options.
If you’re not getting a written service timeline from your broker, you’re already losing.
The Timeline and the Accountability
A professional insurance broker should be more than just a salesperson. They are a service provider. If you are not getting a formal, written “Service Timeline” or “Stewardship Report” from your broker, you are already losing. This document should outline the specific services they will provide you throughout the year, from pre-renewal strategy meetings to claims reviews to contract consultations. It is a written promise that turns your informal relationship into a professional one and holds your broker accountable for the fee you are paying them.
Stop glorifying the “family friend” agent. Start demanding professional expertise.
The Friend and the Fumbled Policy
My company’s insurance was handled by a family friend for years. It was a comfortable relationship, but he was a generalist agent. As our business grew more complex, he was out of his depth. He made a major error on our renewal that left us with a dangerous gap in our coverage. We had to fire him. I learned to stop glorifying the “family friend” relationship. Your business is not a hobby. It is a serious enterprise that requires a serious, professional insurance advisor with documented expertise in your specific industry, not just a nice guy you know from barbecues.
The real cost of a “free” broker consultation that nobody calculates.
The Consultation and the Commission
A broker will offer your business a “free” consultation and a “free” analysis of your insurance policies. The consultation is not free. You are paying for it with your time and, more importantly, with valuable information about your business. The broker is using that consultation to gather the data they need to try and win your business and earn a commission. The real cost of that “free” meeting is the hours you spend with a broker who may not be the right fit for your business in the first place.
What sophisticated insurance buyers do when selecting a broker that amateurs don’t.
The RFP and the Rigorous Review
An amateur business owner will choose a broker based on a friendly lunch meeting or a low-ball quote. A sophisticated insurance buyer would never do this. They conduct a formal “Request for Proposal” (RFP) process. They invite a select group of pre-qualified, specialist brokers to submit detailed written proposals. The proposals must include the resumes of the service team, specific case studies, and a strategic plan for the account. The decision is made based on a rigorous, objective review of the brokers’ demonstrated capabilities, not on a handshake.
The myth of the “one-stop-shop” agency is destroying your risk management program.
The “One-Stop” and the One-Size-Fits-None Solution
The idea of a “one-stop-shop” insurance agency that can handle all your needs sounds so convenient. It’s a myth, and it’s destroying your risk management program. No single agency can be a true expert in every single type of complex risk. The agent who is great at your property insurance is probably not an expert in cyber liability. The person who handles your health benefits is not a specialist in Directors & Omissions coverage. A sophisticated program requires a team of best-in-class specialists, not a single generalist who is mediocre at everything.
I quit my “big box” brokerage firm and my service and coverage improved dramatically.
The Behemoth and the Boutique
I used to work for a massive, “big box” national insurance brokerage. I was just a number, and my clients were just a line on a spreadsheet. I quit and joined a smaller, “boutique” brokerage firm that specialized in my industry. The difference was night and day. I had more autonomy, better access to senior experts, and the ability to provide a much higher level of personal service to my clients. I learned that for a client with complex needs, the deep expertise and personal attention of a boutique firm is often vastly superior to the impersonal machine of a giant brokerage.
Controversial: Your broker is holding you back from innovative risk solutions.
The Commission and the Lack of Creativity
Here’s a controversial take: your traditional insurance broker may be holding you back. Their compensation is based on a commission tied to your premium. They have a financial incentive to sell you a standard, expensive insurance policy. They have no incentive to suggest more innovative risk management solutions, like forming a captive insurer or using parametric policies, because they don’t earn a commission on them. Their traditional compensation model can be a barrier to the kind of creative, modern risk solutions that could actually save you money and provide better protection.
95% of online advice about choosing an agent is wrong. Here’s why.
The Agent’s Advice on Choosing an Agent
Almost all the online articles on “how to choose an insurance agent” are written by insurance agents themselves. They are filled with self-serving, generic advice like “find someone you trust” or “look for a good listener.” They are content marketing pieces designed to get you to call them. They will not tell you the hard truths. They won’t tell you to demand a written service plan, to ask about their commission structure, or to interview multiple brokers in a formal process. They are giving you the advice they want you to hear, not the advice you need.
One small change to our broker selection process eliminated our biggest coverage gaps.
The Specialist and the Solved Problem
For years, we used a generalist insurance broker to handle our manufacturing business. We were constantly discovering gaps in our coverage. We made one small change to our selection process. We decided we would only work with a broker who had a designated “manufacturing practice group” and could provide us with at least three references from other manufacturing companies. This simple requirement ensured we were working with a true specialist who understood our unique risks. Our coverage gaps disappeared almost overnight.
The truth about wholesale brokers that your retail agent profits from hiding.
The Wholesaler and the Hidden Middleman
You think your retail insurance agent is going directly to the insurance companies on your behalf. Often, they are not. For complex or hard-to-place risks, your retail agent has to go to another, hidden middleman called a “wholesale broker.” This wholesaler is the one who has the specialized expertise and the market access to get the quote. Your agent profits by not telling you about this, because it makes them seem more capable than they are. Understanding the role of the wholesaler is key to understanding who really controls your access to the best coverage.
Stop letting your broker control the renewal timeline. It’s killing your negotiating power.
The Timeline and the Lack of Time
Does this sound familiar? Your broker shows up with your renewal proposal two days before your old policy expires, creating a false sense of urgency. You have no time to get competing quotes, so you are forced to accept their offer. You are letting your broker control the timeline. A professional insurance buyer takes control. They demand that the broker provide a full renewal proposal at least 30 to 60 days before the expiration date. This gives them time to review it, to negotiate, and, if necessary, to go to another broker. It’s your timeline, not theirs.
Replace your informal relationship with your agent with a formal service agreement. Thank me later.
The Friendship and the Failure to Perform
I had a friendly, informal relationship with my insurance agent for years. I thought that was enough. It wasn’t. When I had a major claim and needed his help, his service was terrible. Our “friendship” didn’t include any actual, documented service standards. I replaced that informal relationship with a formal, written “Service Agreement.” It specifies exactly what services he will provide and the timeline for each. It turned our vague friendship into a professional, accountable business relationship. You will thank me later for this.
The brokerage industry secret that could get you access to exclusive insurance programs.
The Program and the Preferred Access
Here’s an industry secret. Certain brokerage firms have such deep expertise in a specific industry—like construction or technology—that an insurance carrier will give them “delegated authority” to create an exclusive insurance “program.” This means the broker essentially acts like the insurance company, with the ability to quote, bind, and issue policies. These programs often offer broader coverage and more competitive pricing than what is available on the open market. Finding a broker with one of these exclusive programs can be a massive competitive advantage.
Why your traditional agent fails in the world of cyber risk.
The Cyber Risk and the Clueless Agent
Your traditional, main street insurance agent is an expert in insuring your building and your cars. They are completely out of their depth in the world of cyber risk. They don’t understand the difference between first-party and third-party liability, the nuances of a ransomware attack, or the legal requirements of a data breach notification. Cyber risk is the most complex and rapidly evolving threat your business faces. You cannot trust it to a generalist agent. You need a specialist broker who lives and breathes this specific, modern risk.
I ignored my lawyer’s advice to use a specialist broker for years. It cost me a denied claim.
The Generalist and the Gap
My lawyer always told me our company needed a specialist insurance broker for our complex risks. I ignored him for years, sticking with my cheaper, generalist agent. Then we had a major liability claim. It was denied because of a technical exclusion in our policy that a specialist broker would have certainly identified and corrected. The cost of that one denied claim was ten times what we would have paid in higher commissions to a specialist. My lawyer was right. The cost of a generalist is a dangerous gap in your coverage.
Let’s be honest: Your agent’s “market summary” is just a list of the carriers they like.
The Summary and the Subjectivity
Your agent presents you with a “market summary,” a spreadsheet showing quotes from three different insurance carriers. It looks so professional and objective. Let’s be honest: it’s not. It’s just a list of the three carriers that your agent has the best relationships with or the ones that pay the highest commission. It is not a true representation of the entire market. A true market analysis requires a much more rigorous and transparent process, where the broker discloses every single carrier they approached and the results from each.
87% of buyers get broker interviews wrong. Don’t be one of them.
The Interview and the Irrelevant Questions
When most business owners interview a potential new broker, they ask the wrong questions. They ask, “Can you save me money?” or “Who are your biggest clients?” These are irrelevant. The right questions are about process and expertise. You should be asking, “Can you show me a sanitized example of an underwriting submission you prepared for a client like me?” or “Can you walk me through your pre-renewal strategy process?” The answers to these questions will reveal their true level of professionalism, not just their sales skills.
This weird habit of asking about a broker’s E&O policy outperforms asking about their clients every time.
The E&O and the Insight It Gives
When I’m interviewing a new broker, I have a weird habit. I ask them, “Can you tell me about your firm’s own Errors & Omissions insurance policy? What are your limits, and who is the carrier?” This question tells me so much more than asking for a client list. It tells me how seriously they take their own risk management. A top-tier firm will have a high-limit policy with a leading carrier, and they will be proud to talk about it. It’s a powerful insight into their own professionalism.
The real reason you can’t get your broker to call you back (hint: it’s not because they’re busy).
The Call and the Commission
You’re a small business owner, and you can’t seem to get your broker to call you back about a small problem. You think it’s because they are so busy with bigger clients. The real, unspoken reason is simpler: they are not getting paid to talk to you. An insurance broker’s primary compensation is the commission they earn when they sell you a new policy or renew an old one. They don’t earn anything for providing day-to-day service. For many brokers, service is a cost center, not a profit center, and their response times often reflect that economic reality.
Ditch your generalist agent. Use a broker who specializes in your industry instead.
The Specialist and the Superior Solution
I own a brewery. For years, my insurance was with a generalist agent who also insured the flower shop next door. He was a nice guy, but he didn’t understand my risks, like equipment breakdown for my tanks or product recall for a bad batch. I ditched him and hired a broker who specialized only in breweries. The difference was incredible. He knew my business inside and out and had a tailored insurance program that was both cheaper and infinitely more comprehensive. In insurance, specialists always beat generalists.
Stop pretending your agent understands your business. Test them.
The Test and the Truth
You think your insurance agent understands your business. You should test that assumption. At your next meeting, ask them a simple, but specific, question about your industry’s biggest risk. For a contractor, ask them to explain the difference between “per-project aggregate” and “per-location aggregate.” For a tech company, ask them about the “breach of contract” exclusion in their E&O form. Their ability—or inability—to answer that one specific question will tell you everything you need to know about their actual level of expertise.
The 7-word phrase that changed how I think about my relationship with my broker.
My broker works for me, not me.
For years, I felt like I worked for my insurance broker. I was constantly chasing him for information and scrambling to meet his last-minute deadlines. I was a passenger in my own renewal process. Then I adopted a new mindset, summed up in this seven-word phrase: “My broker works for me, not me.” This simple shift in perspective put me back in the driver’s seat. I now set the timeline, I demand the information, and I hold him accountable for his performance. He is my professional service provider, not my boss.
What the insurance industry doesn’t want you to know about broker compensation.
The Handshake and the Hidden Handouts
What the insurance industry doesn’t want you to know is that your broker’s compensation is often much more than the simple commission you see. Many carriers provide brokers with lavish “contingent” bonuses, fancy trips, and other perks for bringing them a high volume of profitable business. This creates a powerful, but hidden, financial incentive for your broker to steer you towards a specific insurer, even if it’s not the best one for you. The handshake you see is often influenced by a handout you don’t.
I was today years old when I learned what a Managing General Agent (MGA) actually does.
The MGA and the Middle Ground
I was today years old when I learned what a Managing General Agent (MGA) is. I thought they were just another broker. They’re not. An MGA is a specialized type of wholesale broker that has been given “underwriting authority” by an insurance carrier. This means they can act like a small insurance company themselves. They can quote, bind, and issue policies on behalf of the carrier. For a unique or hard-to-place risk, an MGA can be a creative and flexible alternative to a traditional insurer.
Normalize asking your broker for a full copy of their submission to the underwriters.
The Submission and the Scrutiny
You should normalize this practice immediately. After your broker tells you they have sent your business out to the market, you should ask for a complete, unedited copy of the underwriting submission they sent. This is the document that represents your company to the insurance world. Reading it allows you to see how your broker is portraying you. Is it professional? Is it accurate? Is it compelling? It holds your broker accountable for the quality of their work and gives you incredible insight into how the market sees you.
Plot twist: Your biggest advocate isn’t your agent. It’s a fee-based risk management consultant.
The Broker vs. The Unbiased Advisor
You think your insurance broker is your biggest advocate. The plot twist is that they are not. Your broker is a salesperson who is paid a commission by the insurance company. Their advice will always be tied to the sale of an insurance product. A fee-based, independent risk management consultant, however, works only for you. They take no commissions. Their only job is to provide you with unbiased advice on how to best manage your risk, whether that involves buying insurance or not. They are the only truly independent advocate you can have.
The broker RFP everyone ignores that gives me an edge in negotiations.
The Request and the Ruthless Competition
Most businesses just stick with the same broker for years. The “Request for Proposal” (RFP) for a new broker is a tool everyone ignores, but it gives me a massive edge. Every three years, I conduct a formal RFP process. I make my incumbent broker compete against two other, hand-picked specialists. It forces all of them to put their best foot forward, to bring their most creative ideas, and to be as aggressive as possible on pricing. It’s a ruthless competition that ensures I am always getting the absolute best the market has to offer.
Stop optimizing for a friendly agent. Optimize for a technically proficient broker.
The Friend vs. The Financial Fortress
My old insurance agent was a great guy. We’d go to lunch, and he’d ask about my family. He was a friend. He was also not a very good insurance broker. His technical knowledge was weak, and our company had several coverage gaps. I stopped optimizing for a friend and started optimizing for a technical expert. My new broker is less talkative, but she is a brilliant technician who has built a financial fortress of coverage around my business. I have plenty of friends; I only need one expert risk advisor.
The brutal truth about why your long-term relationship with your agent isn’t getting you the best deal.
The Loyalty and the Laziness It Breeds
You have been with the same insurance agent for 20 years. You think your loyalty is earning you a good deal. Here’s the brutal truth: it’s probably doing the opposite. Your long-term relationship has bred complacency. Your agent knows you are not going to leave, so they have no incentive to be aggressive on your behalf. They just renew the same old policy with the same old carrier year after year. The best deals go to the clients who create competition and make the brokers and carriers fight for their business.
Throw away your agent’s one-page proposal. It’s making you worse at understanding your coverage.
The Proposal and the Pathetic Lack of Detail
Your agent hands you a one-page proposal for your multi-million dollar business. It has a premium, a few limits, and a logo. It is a pathetic and useless document. It tells you nothing about the exclusions, the sub-limits, the definitions, or the conditions of the policy you are about to buy. It is making you a less-informed buyer. Throw it away. Demand that your broker provide you with a detailed proposal that includes the actual policy forms and endorsements they are recommending.
The 5-minute test that reveals if your agent has any real market clout.
The Call and the Clout
To find out if your agent has any real power in the market, try this 5-minute test. Give them a hypothetical, but difficult, scenario. Say, “I need to get a quote for a very specific, manuscripted endorsement from a major carrier, and I need it in 48 hours.” An agent with real market clout has the relationships and the leverage to pick up the phone and get a senior underwriter to look at it immediately. A small, powerless agent will just tell you it’s impossible. Their response will tell you everything.
Why everyone is wrong about how much influence a broker has on pricing.
The Broker’s Influence and the Illusion of Control
Everyone thinks that a great broker can work magic and get them a dramatically lower price on their insurance. They are mostly wrong. A broker’s influence on the final premium is actually quite small. The price is driven by the underwriting data: your loss history, your industry, and your risk profile. A great broker can’t change the math. What they can do is influence the coverage. They can negotiate broader terms, better endorsements, and fewer exclusions. They don’t control the price; they control the quality of the product you get for that price.
Stop asking “who do you represent?”. Ask “how many carriers have you approached for my specific risk?” instead.
The Representation and the Real Reach
When interviewing a broker, business owners often ask the vague question, “Who do you represent?” A better, more revealing question is, “For my specific type of business, exactly how many insurance carriers have you approached with our submission, and can you show me the results from each?” This question cuts through the sales pitch. It forces the broker to reveal the true breadth and depth of their marketing efforts. It shows you whether they are truly scouring the market for you, or just going to their one or two favorite carriers.
The habit of documenting broker promises that I wish I’d started 20 years ago.
The Promise and the Paper Trail
Brokers are salespeople. They make a lot of verbal promises in meetings. “Don’t worry, that’s covered.” “I’ll take care of that for you.” I wish I had started this habit 20 years ago: after every single meeting or call, I send a follow-up email documenting the promises the broker made. “Hi Bill, great to talk today. Just to confirm, you are going to get us a quote for…” This simple paper trail turns a verbal promise, which is worthless, into a documented instruction, which can be a lifesaver if something goes wrong.
Here’s why that celebrity-endorsed insurance agency is terrible for complex needs.
The Celebrity and the Lack of Substance
You see a famous celebrity endorsing a new, tech-savvy insurance agency. They look modern and trustworthy. Here’s why they are terrible for a business with complex needs. That agency is built for volume and simplicity. They are selling a standardized, one-size-fits-all product to a mass market. They do not have the specialized brokers, the underwriting expertise, or the market access to handle a complex manufacturing risk, a large non-profit, or a high-net-worth family. They are all sizzle and no steak.
I’ll say what everyone’s thinking: Your broker hopes you don’t read the actual policy.
The Document and the Dust It Gathers
Let’s just be honest and say what everyone is thinking. Your insurance broker, after they’ve sold you the policy and collected their commission, is secretly hoping that you will take that 200-page policy document, put it in a drawer, and never, ever read it. They hope you will just trust their one-page summary. Why? Because if you actually read the policy, you will find the gaps, the exclusions, and the confusing language. You will start asking difficult questions. Reading the policy is the single most powerful act of a truly educated insurance buyer.
The skill of writing a Broker of Record letter that matters more than your claims history.
The Letter and the Legal Power
A “Broker of Record” (BOR) letter is a simple, one-paragraph letter that fires your old broker and hires a new one. The skill of writing an effective BOR letter is incredibly valuable. A well-written letter, delivered at a strategic time in the renewal cycle, can give a new, more qualified broker the instant leverage they need to take control of your account and immediately start negotiating with the carriers on your behalf. In a competitive situation, the power of that one letter can be more impactful than years of claims history.
This counterintuitive action of firing our long-time broker fixed our pricing and coverage problems.
The Firing and the Freedom
We were with the same insurance broker for 15 years. We were loyal, but our coverage was stale and our prices kept creeping up. We made a counterintuitive and difficult decision: we fired him. We moved our business to a new, more aggressive brokerage firm. The results were stunning. The new broker brought us fresh ideas, broader coverage, and a premium that was 20% lower. We learned that our loyalty was actually holding us back. Firing our old broker was the single best thing we could have done for our risk management program.
Why your good intention of being a “loyal client” is actually making your broker lazy.
The Loyalty and the Lethargy
You pride yourself on being a loyal client to your insurance broker. You’ve been with them for years. Your good intention is actually making your broker lazy and complacent. They know you’re not going to leave. They have no incentive to work hard for you, to scour the market for better options, or to bring you creative ideas. They just put your renewal on autopilot. The most disloyal thing you can do—making them compete for your business—is the only thing that will keep them sharp and motivated.
Quit using your payroll company for workers’ comp. It’s not worth the lack of expertise.
The Payroll and the Policy Problem
Many payroll companies now offer a “pay-as-you-go” workers’ compensation insurance plan. It seems convenient. It’s a mistake. Your payroll company is a technology company, not an insurance expert. They are just reselling a policy from a single carrier. They cannot provide you with expert advice on claims, safety programs, or managing your experience modifier. When you have a serious claim, you will find you have no expert advocate in your corner. The convenience is not worth the massive sacrifice in expertise and service.
The metric everyone tracks (the premium) that means absolutely nothing if your broker placed you with an insolvent carrier.
The Premium and the Bankrupt Promise
Business owners are obsessed with their insurance premium. They see it as the most important metric. It means absolutely nothing if your broker places your coverage with an insurance company that is financially weak and on the brink of insolvency. A low premium from a carrier with a poor financial rating is the worst bargain in business. The real measure of a broker’s professionalism is their commitment to using only high-rated, financially secure insurance carriers. A cheap promise from a bankrupt company is worthless.
Stop calling it a “partnership.” Call it a “professional service with contractual obligations.”
The Partnership and the Professional Relationship
I used to refer to my relationship with my insurance broker as a “partnership.” It sounded collaborative and friendly. My lawyer advised me to stop. He said, “It is not a partnership. It is a professional service relationship with contractual obligations.” This shift in language was critical. A partner shares in your success and failure. A service provider has a specific set of duties they are paid to perform. Thinking of my broker as a professional I have hired, rather than a partner, has made me a much better and more demanding manager of that relationship.
The decision I made to hire a fee-based consultant to manage our broker RFP that everyone said was a waste of money (but worked).
The Consultant and the Controlled Competition
Our company was big enough that we wanted to conduct a formal “Request for Proposal” (RFP) for a new broker. We made a decision that everyone said was a waste of money: we hired a fee-based risk management consultant to design and run the RFP process for us. It was a brilliant move. The consultant, an unbiased expert, was able to create a level playing field and conduct a truly objective analysis of the competing brokers. It removed all the personality and salesmanship from the process and allowed us to choose a new broker based on pure, data-driven evidence.
What I learned from being on the inside of a major brokerage that changed everything.
The Client and the Classification
I used to work for a giant, national insurance brokerage. Here’s what I learned on the inside. Every single client was internally classified into an A, B, or C tier. The “A” clients, our biggest and most profitable accounts, got the full attention of our senior experts and our best service. The “C” clients, the smaller accounts, were handed off to junior staff and received minimal, reactive service. The level of service you receive is a direct reflection of how much money your broker is making from your account. It’s a brutal, but honest, reality.
The common mistake of letting your agent “block the market” that’s costing you options.
The Block and the Barrier to Bids
When you ask an agent to get you a quote, they will often go to their favorite underwriter and get a “block” on your account. This means that no other agent can get a quote from that same underwriter for your business. An unethical agent will do this with multiple carriers, effectively “blocking the market” and preventing you from getting competing bids. This is a common mistake that business owners fall for. You should always be clear with an agent about which specific carriers you are authorizing them to approach.
PSA: An agent’s verbal binder is a scam. Here’s proof.
The Binder and the Broken Promise
Here’s a public service announcement: an agent’s verbal promise that “you’re bound” is not a real insurance binder. I once had an agent tell me on the phone that my new policy was in effect. I took his word for it. When I had a claim a week later, there was no record of the policy ever being issued. A real binder is a formal, written document, with a policy number and a specific effective date. Any agent who tells you that a verbal “OK” is good enough is either lazy or lying, and either way, they are putting you at massive risk.
The skill of interviewing a broker that business schools should teach but don’t.
The Interview and the Insight
Business schools teach you how to interview for a job. They should be teaching you how to interview a professional service provider, like an insurance broker. The skill of conducting a rigorous, insightful interview is critical. You need to know how to ask probing questions about their experience, their process, and their expertise. You need to be able to see past the sales pitch and assess their true capabilities. The ability to hire the right advisors is one of the most important, and untaught, skills in business.
This 5-minute action of checking your state’s database for complaints against your agent beats trusting testimonials every time.
The Database and the Due Diligence
Before I hire any new insurance agent, I take five minutes to do one simple thing. I go to my state’s Department of Insurance website and I look them up in the public database. I can see if their license is current and, more importantly, if they have had any formal complaints or disciplinary actions filed against them. An agent’s hand-picked testimonials are worthless. A clean record with the state regulator is a much more powerful and objective measure of their professionalism. It’s the easiest due diligence you can do.
Why that big national brokerage is actually doing it wrong for main street businesses.
The Giant and the General Store
A small, “main street” business, like a restaurant or a retail shop, should not be using a giant, national brokerage firm. It’s the wrong tool for the job. The big brokerage firms are structured to handle the complex, global risks of Fortune 500 companies. They are not set up to efficiently or cost-effectively serve a small business. A main street business will almost always get better service, more attention, and a more appropriate policy from a high-quality, local independent agent who specializes in small commercial accounts.
Stop waiting for your agent to bring you ideas. Start with a list of your own demands.
The Demand and the Dynamic
I used to have a passive relationship with my insurance agent. I would wait for him to bring me his renewal proposal, and then I would react to it. I flipped the script. Now, 90 days before renewal, I send him a “demand letter.” It’s a professional document that outlines my expectations for the renewal, including the specific coverage enhancements I want him to explore and the timeline I expect him to follow. It has completely changed the dynamic. I am no longer a passive recipient; I am the client setting the agenda.
The risk management consultant I use that most business owners have never heard of.
The Consultant and the Conflict-Free Advice
Most business owners think their only option for insurance advice is a commissioned broker. They have never heard of a fee-based, independent risk management consultant. These are professionals, often former underwriters or brokers, who do not sell insurance. You pay them an hourly fee, and their only job is to provide you with pure, unbiased advice. They can help you hire a broker, review policies, and manage claims. Because they have no commission at stake, their advice is completely conflict-free. They are the ultimate secret weapon of a sophisticated insurance buyer.
Your service problem exists because you believe your agent works for you (they work for the commission).
The Service and the Salesperson
You are having a service problem with your agent because your fundamental belief is wrong. You believe your agent works for you. In most cases, they do not. They work for the commission that is paid by the insurance company. They are a salesperson. While good agents provide great service to retain your business, their economic incentive is tied to the sale, not to the service. The moment you understand this fundamental economic reality, you will become a more empowered and demanding manager of the relationship.
Delete that agent’s “contact me” app. Your privacy will improve instantly.
The App and the Unseen Angle
Your insurance agent has a handy app that lets you contact them and view your policies. It seems convenient. You should delete it. These apps are often a privacy nightmare. They can track your location, access your contacts, and gather other data from your phone. That data can be used for marketing purposes or even to analyze your risk profile. The convenience of the app is not worth the price of giving your insurance agent a 24/7 window into your personal life. Your privacy will improve instantly.
The advice on broker compensation I give that makes agents uncomfortable (but works).
The Fee and the Full Transparency
Here’s advice that makes most brokers very uncomfortable. I tell them I want to move to a “fee-in-lieu-of-commission” arrangement. This means I will pay them a flat, pre-negotiated professional fee for their services, and they must disclose and remit all the commissions they receive from the insurance companies back to me. This completely eliminates all the hidden conflicts of interest. It makes them my transparent, unbiased advisor, not a salesperson. Most brokers will hate it, but the best, most professional ones will embrace it.
Why the common fear of changing brokers is irrational and the real fear of stagnant advice is ignored.
The Fear and the False Loyalty
Business owners often have an irrational fear of changing their insurance broker. It feels like a massive, complicated hassle. They are afraid of damaging a long-term relationship. This fear is misplaced. The real, rational fear should be the fear of stagnant advice. An incumbent broker who has gotten lazy and comfortable is a much greater threat to your business than the short-term inconvenience of a broker change. Fearing the change while ignoring the risk of complacency is a classic business mistake.
I tried to use an online-only broker for a liability claim so you don’t have to. Here’s what happened.
The Online and the Offline Disaster
I thought I was being modern and efficient by using an online-only insurance brokerage for my business. The website was great. Then I had a complex liability claim. It was an offline disaster. I had no dedicated advocate to talk to. I was just a number in a call center queue. The online platform was not equipped to handle the nuance and the negotiation of a real claim. I learned that while technology is great for buying a policy, in a claim, you need a real, experienced human broker to be in your corner.
The question about “direct appointments” that instantly reveals if an agent knows the market.
The Appointment and the Access
When I’m vetting a new agent, I ask them this simple question: “Can you please provide me with a list of the insurance carriers with whom you have a direct agency appointment?” An agent’s “direct appointments” are the insurance companies they can go to directly, without a middleman. This question instantly reveals the true breadth of their market access. An agent with only a few direct appointments has very limited options for you. A broker with dozens of appointments is a serious player with real market reach.
This old-school method of getting referrals from industry associations beats every online search.
The Association and the Authentic Referral
Searching for an insurance broker online is a crapshoot. You’ll just find the people who are best at SEO. I use a much better, old-school method. I call the executive director of my industry’s professional trade association and I ask them for a referral. I ask, “Who are the top two or three insurance brokers who specialize in our industry?” The association director has a bird’s-eye view of the entire market. They know who the real experts are. Their referral is infinitely more valuable than a Google search.
Stop romanticizing “insurtech” for business. It’s actually just a lead generation tool.
The Insurtech and the Illusion of Innovation
The business world is romanticizing the “insurtech” revolution. They see these slick new platforms and think they are a new way of doing insurance. They’re not. For the most part, they are just a new way of generating leads. They use technology to capture your information and then they sell that lead to a traditional broker or carrier. They have innovated the front-end sales process, but they have not innovated the fundamental, back-end business of underwriting complex risk. It’s an illusion of innovation.
The principle of “agency” that guides every interaction I have with my broker.
The Agent and the Authority
The legal principle of “agency” is the foundation of my relationship with my insurance broker. It means that my broker is my legal agent, acting on my behalf. Their actions and their knowledge are legally imputed to me. This is a powerful, but also dangerous, relationship. It means I must trust their expertise implicitly, but I must also manage them professionally. Every communication I have with my broker is guided by the understanding that I am talking to a legal representative of my own company.
Why your agent’s years of experience is vanity and their recent case studies are sanity.
The Experience and the Evidence
An insurance agent will often lead with their “30 years of experience.” This is a vanity metric. It’s irrelevant. The market has changed more in the last five years than in the previous twenty-five. The question that represents sanity is, “Can you please show me three recent case studies of how you have helped a client with a risk profile similar to mine?” Their recent, relevant, and documented successes are the only true measure of their current capabilities. I don’t care about what they did in 1995; I care about what they can do for me today.
Forget loyalty. Aim for accountability from your insurance advisor instead.
The Loyalty and the Lack of Leverage
For years, I believed in being a “loyal client” to my insurance advisor. I thought it would earn me better service. It did the opposite; it made him complacent. I changed my entire mindset. I no longer aim for loyalty. I aim for accountability. I have a formal service agreement with my broker. We have quarterly meetings with a set agenda. We track performance against specific goals. By replacing the vague feeling of “loyalty” with a professional system of “accountability,” I have a much stronger and more effective advisory relationship.
The realization that made me quit using my financial planner for P&C insurance forever.
The Planner and the Property & Casualty Problem
My financial planner was great at managing my investments. He also offered to handle my Property & Casualty (P&C) insurance, like my home and auto. It seemed convenient. It was a mistake. He was not a P&C expert. He placed my policies with a single carrier that his firm had a deal with. I had a major claim and discovered I was massively underinsured. I had the realization that I would never use my insurance agent to manage my stock portfolio, so why was I using my financial planner to manage my complex insurance needs?
What amateurs do when choosing an agent that pros never do.
The Feeling vs. The Formal Process
An amateur business owner will choose an insurance agent based on a “gut feeling.” They’ll meet with someone, like them, and hire them on the spot. A professional insurance buyer would never, ever do this. A pro uses a formal, objective process. They will conduct a rigorous “Request for Proposal” (RFP). They will score the candidates based on a pre-determined set of criteria, like their expertise, their service plan, and their market access. The decision is based on data, not a feeling.
The investment in a broker contract review that everyone avoids that has the highest ROI.
The Contract and the Clarity It Creates
Most businesses just accept their broker’s standard service agreement without reading it. They avoid the cost of having a lawyer review it. This is a huge mistake. The investment in a legal review of your broker’s contract has a massive ROI. A lawyer can identify any unfair or one-sided clauses. They can help you add language that strengthens the broker’s duties to you. It turns a standard agreement into a powerful tool that creates clarity and accountability, which can save you a fortune down the road.
Stop saying “my insurance guy.” Say “my risk advisor and contracted insurance broker.”
The “Guy” and the Gravitas
When you refer to your insurance agent as “my insurance guy,” you are immediately diminishing their professional standing and the seriousness of their role. It sounds like you’re talking about the guy who fixes your lawnmower. I’ve learned to use more professional language. I say, “I need to check with my risk advisor and contracted insurance broker.” This language gives the role the gravitas it deserves. It reminds me, and everyone else, that this is a key professional advisor, not just some “guy.”
The truth about agent licensing I couldn’t say as an agency owner.
The License and the Low Bar
Here’s a truth about insurance agent licensing I couldn’t say when I owned an agency. The bar to get a license is incredibly low. In most states, it involves a short course and a multiple-choice test. The license proves that the person has the absolute bare minimum knowledge to not break the law. It does not, in any way, prove that they have the expertise, the experience, or the technical knowledge to handle your complex business or personal risks. The license is not a mark of excellence; it is the lowest possible barrier to entry.
This tiny detail in a broker’s service proposal separates amateurs from professionals.
The Timeline and the Mark of a Pro
When I am reviewing service proposals from competing insurance brokers, I look for one tiny detail that separates the pros from the amateurs. An amateur’s proposal will be full of vague promises. A professional’s proposal will contain a specific, dated “Service Timeline” or “Stewardship Calendar.” It will show me exactly what they will do for me, and when they will do it, throughout the year. This one small detail shows me that they are not just salespeople; they are professional project managers who can be held accountable.
Why a low commission is a trap for people who need complex claims advocacy.
The Commission and the Crisis
You’ve negotiated a very low commission rate with your broker. You feel like you’ve won. You’ve actually walked into a trap. A broker’s commission is what pays for their time and their staff. If you have a major, complex claim that requires dozens of hours of their advocacy and support, a broker who is working on a razor-thin commission simply does not have the financial incentive to give you the time you need. For complex risks, you want your broker to be well-compensated, so they have the resources and the motivation to be your champion in a crisis.
Replace your complicated feelings of loyalty with a simple performance scorecard. You’re welcome.
The Feeling and the Factual Scorecard
For years, my decision to stay with my broker was based on a complicated feeling of loyalty. It was a messy and unreliable way to make a key business decision. I replaced that feeling with a simple, objective tool: a Broker Performance Scorecard. Every year, we grade our broker on a scale of 1 to 5 in key areas: their pre-renewal strategy, their claims advocacy, and their proactive advice. The scorecard turns a vague feeling into a concrete performance review and makes the decision to stay or go a simple, data-driven one. You’re welcome.
The skill of managing your broker that’s 10x more valuable than being their friend.
The Manager vs. The Mate
Many business owners think that being friends with their broker is the key to a good relationship. It’s not. The skill of professionally managing your broker is ten times more valuable. This means setting clear expectations, demanding accountability, and regularly measuring their performance against a set of written goals. You are the client. They are the service provider. Your job is not to be their friend; your job is to be their manager and to ensure you are getting the expert service and advice that you are paying for.
Stop treating your broker like a vendor. Treat them like a professional consultant you need to manage.
The Vendor vs. The Valued Advisor
Most businesses treat their insurance broker like any other vendor. They focus on getting the lowest price, and they only talk to them once a year. This is a mistake. You should treat your broker like a high-level professional consultant, like your lawyer or your accountant. You should be meeting with them quarterly. You should be including them in strategic conversations. And, like any key consultant, you need to actively manage their performance and hold them accountable for the advice they provide. They are not just a vendor; they are a key risk advisor.
The experiment I ran of making three brokers compete that proved my incumbent’s “best offer” wrong.
The Competition and the “Best” Offer
My incumbent broker of ten years assured me he was getting me the “best possible deal” from the market. I decided to run an experiment. I hired two other, competing brokers to also get quotes for my business. The result was stunning. One of the new brokers came back with a quote for broader coverage that was 20% cheaper than my incumbent’s “best offer.” The experiment proved that the only way to know if you are getting the best deal is to create a real, competitive environment. My incumbent’s best offer was only his best until he had to fight for it.
Why your old agent worked before but doesn’t understand today’s emerging risks.
The Old Guard and the New Game
Your insurance agent has been with you for 25 years. He’s a great guy. He was perfect for the risks of 1998. He is completely lost in the world of 2024. He doesn’t understand cyber liability, cryptocurrency risk, social engineering fraud, or the nuances of insuring a remote workforce. The entire landscape of risk has changed, and he hasn’t kept up. Your old agent might be a loyal friend, but he is not equipped to be your advisor for the complex, emerging risks of the modern world.
The choice to use a London-based broker that everyone judges that actually makes sense for international risks.
The London Bridge to a Global Market
My company was expanding internationally, and my US-based broker was struggling to get us the coverage we needed. I made a choice that everyone judged as overly complicated: I hired a London-based broker who was a specialist in the Lloyd’s of London market. It was the best decision I ever made. The London market is the global center for complex, international risks. My new broker was able to craft a single, global insurance program that covered our operations seamlessly in every country. For international risks, you need a broker who can build you a bridge to the London market.
I stopped accepting verbal updates and demanded written reports. My broker’s performance improved overnight.
The Verbal and the Verifiable Report
My broker loved to give me quick, verbal updates over the phone. “Everything’s looking good for the renewal,” he’d say. It was easy, but it was also meaningless. I made a change. I told him I would no longer accept verbal updates. I now require a formal, written “Renewal Status Report” from him every two weeks in the 90 days leading up to my renewal. The simple act of requiring him to put his progress in writing has made him more organized, more accountable, and a much more effective advocate for my business.
The concept of “fiduciary duty” that nobody understands but changes how you should view your advisor.
The Fiduciary and the Fundamental Duty
Most people don’t understand the legal concept of “fiduciary duty.” A professional who has a fiduciary duty—like a lawyer or a trustee—has a legal obligation to act in their client’s absolute best interest, free from any conflicts. Most insurance brokers are not fiduciaries. They are salespeople. Understanding this distinction changes everything. It means you should never give your broker the same blind trust you would give your lawyer. You should always maintain a healthy skepticism and remember that their advice may be influenced by their own financial incentives.
This unpopular opinion on agent referrals will trigger networking groups but it’s true.
The Referral and the Lack of Real Vetting
Business networking groups are constantly passing referrals for insurance agents. Here’s an unpopular opinion: these referrals are mostly worthless. They are not based on a rigorous, professional assessment of the agent’s skills. They are usually based on the fact that the agent is a good networker, a nice person, or that they show up to the weekly breakfast meeting. A referral from a networking group is a popularity contest, not a professional vetting process. You still need to do your own, deep due diligence.
Stop copying your friend’s insurance agent. Do your own due diligence instead.
The Friend and the Flawed Fit
Your friend has a great insurance agent and recommends them highly. You should not just hire them. Your friend’s business is different from yours. They have different risks, a different culture, and different needs. The agent who is a perfect fit for your friend’s construction company might be a terrible fit for your tech startup. Stop relying on social proof and do your own professional due diligence. Interview multiple, specialist brokers and choose the one who is the best fit for your unique business, not your friend’s.
The mistake of not asking about a broker’s succession plan I see everywhere that’s so easy to fix.
The Succession and the Stability
I see this mistake everywhere. A business will have a great relationship with a senior, experienced insurance broker. But they never ask the one question that could save them a massive headache: “What is your firm’s succession plan for my account?” What happens when that senior broker retires or leaves the firm? If there is no formal plan in place, your account will be handed off to a junior person who doesn’t know you. Asking about succession ensures a stable, long-term relationship that goes beyond one single individual.
Why this new “AI-powered” agent isn’t innovative. It’s just a sophisticated script.
The AI and the Absence of Advice
A new “AI-powered” insurance agent is getting a lot of press. They claim their technology is a revolutionary innovation. It’s not. It’s just a sophisticated script. The AI can ask you questions and generate a quote based on your answers. But it cannot provide you with wisdom, strategic advice, or creative problem-solving. It cannot negotiate with an underwriter on your behalf. It is a tool for selling a commodity, not for providing professional consultation. It’s an automated salesperson, not an advisor.
The rule I break consistently (never accept the first broker you talk to) and why you should too.
The First and the Final Choice
I have one hard and fast rule that I break 100% of the time: I never, ever hire the first broker I interview, no matter how much I like them. Why? Because without comparison, I have no context. I have no way of knowing if their advice is standard or exceptional, or if their pricing is competitive. By always interviewing at least three qualified candidates, I can compare and contrast their approaches, their expertise, and their strategies. The first interview is just gathering data; it is never the final decision.
Stop believing your agent has your best interests at heart. Believe in the alignment of incentives instead.
The Heart and the Hand That Feeds It
It’s comforting to believe that your insurance agent, especially if they are a friend, has your best interests at heart. It might not be true. Their heart might be in the right place, but their paycheck is signed by the insurance company. The only thing you can truly believe in is the alignment of incentives. A good broker relationship is one where the broker’s success is directly tied to your own. This might be through a fee-based arrangement, or through a long-term strategy where they know that helping you grow will ultimately help them grow.