Why independent insurance broker’s use many insurance companies.

Why independent insurance broker’s use many insurance companies.

    I will say up front, that I am an independent insurance broker, meaning I have many insurance companies at my disposal. This means the ability to shop the market for clients, as not all properties are created equal.
   In a mixed-use building, for example, some companies won’t want this risk if there is a restaurant in the building. Since grease fires are a main cause of restaurant fires, insurance companies shy away from this.
   Or in a strip plaza, if there is a gym or tanning salon, again, some insurance companies shy away from a risk like this. They don’t want the legal fee’s associated with having to defend a lawsuit involving these businesses.
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   Another reason to use an independent insurance broker is because we have a mix of companies that rate differently. Some insurance companies will rate the liability portion of the risk based on square footage. Some will base the liability charge on number of units. Some will base it on total sales and finally, some will have a flat charge, like in a Businessowner’s Policy (BOP for short)
   We insured a risk once, that not many insurance companies wanted, as they had a arcade area for children to play at. We found them an insurance company that didn’t mind this risk at all, so placed the insurance coverage with them.
   We also recently helped a realtor buy 2 historic buildings that were need of a major upgrade, as they had been vacant for over 2 years. While we got 5 rejections for what will eventually be a very low-risk business (Realtor offices), because they were vacant was the rejected reason. We found them very reasonable coverage with an insurance company that did not mind the vacancy factor.
   So sometimes it is not all “black and white” for coverage on a commercial building, depending on the tenant make-up and the conditions about the property. A good insurance broker will have many, many insurance companies at his/her disposal to get a good rate for the risk.
  Next time you should use an independent insurance broker for your commercial building.

Tom Larsen, Speaker, Author, Insurance Adviser

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