Insurance Broker VS Agent? When it comes to insurance for sizeable construction projects, there are two primary types of professionals who can help you secure the insurance coverage you need: general insurance brokers and agents. While both brokers and agents can help you obtain insurance policies, there are some key differences between the two that are important to understand.
What is General Insurance Brokers ?
A general insurance broker is an independent insurance professional who works with a range of insurance providers to help clients find the right coverage. Brokers are not affiliated with any particular insurance company, which means that they can offer clients a wider range of coverage options and often more competitive prices. Brokers work on behalf of their clients, not the insurance companies, and are paid a commission based on the policies they sell.
When it comes to sizeable construction projects, a general insurance broker can be an invaluable resource. Brokers have the expertise to help you evaluate your risks, assess your insurance needs, and find the right policies to protect your project. They can also help you navigate the complex world of insurance policies, including negotiating policy terms, obtaining quotes, and managing claims.
Specifically, when handling insurance for sizeable construction projects, a general insurance broker will typically:
- Review the scope of the project and identify potential risks and exposures
- Evaluate existing insurance policies and identify any gaps in coverage
- Work with the client to determine the appropriate coverage needs and budget
- Shop around for policies from multiple insurance providers to find the best coverage and price
- Negotiate policy terms and premiums on behalf of the client
- Manage the insurance policies throughout the life of the project, including renewals and claims.
What is General Insurance Agents ?
A general insurance agent, on the other hand, is an insurance professional who works directly for an insurance company. Agents are authorized to sell policies for their employer and are paid a commission on the policies they sell.
While agents can be knowledgeable about the insurance policies offered by their employer, they may not have the same level of expertise when it comes to evaluating a client’s needs and finding the best coverage options. They are limited to the policies offered by their employer and may not have access to the same range of coverage options as a broker.
When it comes to insurance for sizeable construction projects, a general insurance agent may be able to help clients obtain coverage, but their options may be limited to the policies offered by their employer. They may not have the same ability to shop around for policies from multiple providers or negotiate policy terms and premiums on behalf of the client.
Specifically, when handling insurance for sizeable construction projects, a general insurance agent will typically:
- Offer policies from their employer that may provide some coverage for the project
- May not have the ability to evaluate potential risks and exposures as in-depth as a broker
- May not have access to the same range of policies and coverage options as a broker
- May not be able to negotiate policy terms or premiums on behalf of the client
- May not have the same level of expertise in managing claims as a broker.
Claims Handling: Broker VS Agent
When it comes to sizeable construction projects, managing insurance claims can be complex and time-consuming. A general insurance broker can help manage claims by providing expertise and support throughout the process. Here are some ways a broker can help manage claims for sizeable construction projects and agent may not:
- Claim Preparation: A broker can help prepare the claim by documenting the loss, filing the claim, and providing all the necessary documentation to the insurance company. This includes gathering information such as incident reports, witness statements, and photographs.
- Claim Negotiation: A broker can negotiate with the insurance company on behalf of the client to ensure that the claim is settled fairly and in a timely manner. This can involve negotiating the amount of the claim, the scope of the coverage, and any other terms that may impact the settlement.
- Claim Advocacy: A broker can act as an advocate for the client throughout the claims process. This includes keeping the client informed of the progress of the claim, answering any questions they may have, and providing guidance and support as needed.
- Claim Resolution: A broker can help ensure that the claim is resolved in a satisfactory manner. This may involve working with the insurance company to obtain a settlement that covers all the damages, negotiating a settlement with other parties involved in the loss, or pursuing legal action if necessary.
- Risk Management: A broker can help the client develop a risk management strategy that can help prevent future losses. This may involve identifying areas of risk, implementing safety measures, and making changes to insurance coverage to better protect against potential losses.
Overall, a general insurance broker can play an important role in managing claims for sizeable construction projects. By providing expertise and support throughout the claims process, a broker can help ensure that the client receives a fair settlement and that future losses are minimized.
Three well-known general insurance brokers operating in Asia:
- Willis Towers Watson – Willis Towers Watson is a leading global insurance broker and risk management company with offices throughout Asia. They offer a wide range of insurance products and services, including property, casualty, and liability insurance, as well as employee benefits and risk management consulting.
- Marsh & McLennan Companies – Marsh is a global insurance broker and risk management company with a significant presence in Asia. They offer a wide range of insurance products and services, including property, casualty, and liability insurance, as well as employee benefits and risk management consulting.
- Aon – Aon is another global insurance broker with a strong presence in Asia. They offer a broad range of insurance products and services, including property, casualty, and liability insurance, as well as employee benefits and risk management consulting.
However, some insurance brokers may decide to setup an agency company in certain countries due to their business stragegy, for example, Aon Japan is an insurance agent, NOT an insurance broker. That would mean that if you consider appointing Aon Japan to handle your construction insurance, please expect that they are acting for their Employers, i.e. insurance companies, NOT their client, i.e. your company. Even worst, what can go wrong if your insurance is handled by an insurance agent?
What can go wrong if the construction insurance is handled by an agent?
If your company’s insurance is handled by an agent rather than a broker, there are several potential risks and challenges that you may face:
- Limited options: An agent typically works with only one insurance carrier or a limited number of carriers, which means you may not be presented with a wide range of insurance options to choose from. This could result in your company not obtaining the best coverage or price.
- Conflict of interest: An agent may have a financial incentive to sell you a particular insurance product or coverage level, even if it is not the best fit for your company’s needs. This is because agents often receive commissions or other compensation based on the policies they sell.
- Lack of expertise: While agents can be knowledgeable about the insurance products they sell, they may not have the same level of expertise as a broker who specializes in insurance. This could result in important coverage gaps or other issues that could leave your company vulnerable to risk.
- Limited advocacy: An agent is typically focused on selling insurance products, rather than advocating for your company’s best interests. A broker, on the other hand, is often more focused on providing personalized advice and guidance to help you navigate complex insurance issues.
Overall, while working with an agent can be a good option for some companies, it may not always be the best fit for sizeable projects. If you have concerns about your company’s insurance coverage, it may be worth considering working with a broker instead.
In conclusion, when it comes to insurance for sizeable construction projects, working with a general insurance broker may be the better option. Brokers have the expertise to evaluate a client’s risks and exposures, identify coverage gaps, and find the best policies to protect the project. They also have access to a wider range of policies and coverage options, and the ability to negotiate policy terms and premiums on behalf of the client. While a general insurance agent may be able to offer some coverage options, their ability to provide comprehensive coverage may be limited by the policies offered by their employer.
