Broker vs Independent Agent vs Captive Agent
While the traditional definition of an Insurance Broker is an individual specialized in insurance and risk management that is focused on the buyers unique needs, when it comes to professional and business lines coverage such as malpractice or workers compensation, a Broker acts as an intermediary between the Independent Agent and the buyer. Brokers have access to a host of carriers and then contracts with individual Agents to offer such access.
Independent Agent (This is what we are)
Independent Agents, like Brokers must have appropriate licenses to obtain and/or distribute insurance coverage, while also being responsible for adhering to the laws and regulations of the various states insurance departments in which they are licensed to sell. IA’s contract with Brokers and/or Brokerage Firms to gain access to the carriers with which they would not normally be able to place business.
Side Note: Thompson Professional Insurance Agency has relationships with multiple Brokerage Firms which extends us the opportunity to shop coverage, compare rates and obtain the best, personalized options for our clients. Working with a variety of carriers affords a broader understanding and subsequent ability to thoroughly explain each companies’ offerings and key benefits. Having multiple options to present to our clients allows for presentation of the ‘bells and whistles’, some of which may be an individual necessity, while avoiding the unnecessary ones that may result in increased rates.
Captive Agents are those professionals representing only one insurance carrier. For example, State Farm agents provide only those products and services of State Farm. While their knowledge of the product being sold is exceptional, Captive Agents cannot provide access to products or pricing from outside their respective carrier.
So, there you have it. The many faces of insurance sales professionals consolidated into an easy to understand description. Next question – Who “Needs” an Insurance Agent/Broker?