Using a Credit Insurance Broker
Michael C. Dennis, MBA, CBF

There are essentially two kinds of representatives in the insurance business: Insurance Brokers; and Exclusive Agents. Exclusive Agents only offer one insurer's products. Insurance Brokers write coverage for more than one insurance company. There are a number of advantages of using a Broker rather than an Exclusive Agent, including these:

Brokers are not restricted to dealing with one or a very limited number of insurance companies. They are independent. Brokers usually research a variety of insurance companies before presenting one or more insurance policies that seem to best meet your company’s needs.
Brokers work for you. An insurance broker's primary duty is to his or her client, not to an insurance carrier.

Some Brokers are specialists or employ specialists who are experts on credit insurance policies. These experts can and usually do recommend:

• Specific carriers

• Specific policies

• Options and coverages that meet your needs

• Policies that offer the best combination of coverage, price, terms and service for their clients.

An insurance broker is an advisor, not simply a vendor. A credit insurance broker should be willing an able to take the time to discuss the risks and benefits of the options and alternatives presented. A good Broker will act as a liaison between your company and the insurance company, and will try to negotiate concessions from the insurance carrier that strengthen your position. Some companies work with several brokers, playing one against the other in an effort to secure the best terms possible under the circumstances. Competition will often make insurance companies more willing to negotiate with buyers.

It is in your best interest to find a Broker or an Agent who will take the time to understand your company's goals and expectations relating to credit insurance coverage. Cost alone is usually not the primary reason to purchase a particular company’s credit insurance policy. Instead, it is the combination of cost, coverage, conditions, and exclusions that determines whether a particular policy makes sense for your company.

An important consideration involves claims handling. Your relationship with the Broker should be more than sell and forget. When your company must file a claim under its credit insurance coverage, your broker should be an active part of this process offering advice and insight.

If you use a broker, periodically do some comparison shopping. Failing to do so might result in your company paying more for coverage than it needs to. If the Broker complains, simply explain that it is company policy to evaluate other potential suppliers from time to time to ensure that your company is not paying too much. If the Broker has your company’s best interests in mind, there is little reason for them to object to a second Broker providing a quote to your company.