The Pros and Cons When Working With Two Insurance Brokers

I recently had a client decide to split up her insurance renewal between two commercial insurance brokers. As an insurance broker, I see the pros and cons to splitting up your insurance book.


Pros:

1.) The insured has a perceived level of control over their accounts by splitting up the business between two reputable brokers. If one brokerage goes out of business, there is an established relationship with another broker already in place.

2.) The insured is able to bounce ideas, premiums, rates and insurance markets off of the alternate broker. It's always good to keep your current broker honest.

3.) One broker may have access to different markets then the other.

Cons:

1.) If you are using different brokers for the same line of insurance, this can get complicated and messy. When an insurance company receives more then one submission on the same line of insurance for the same insured, it can trigger an underwriter to think "this insured only cares about the premium and not coverage". Bottom of the pile your submission goes. If you are adamant about using more then one broker on the same line of insurance, be honest with your current broker and assign markets to the specific brokers. Any creditable insurance broker should keep you up to date with the market response regardless of whether there is another broker involved.

2.) As an insured, you now have to obtain certificates from two separate brokers. If you've placed your workers compensation with ABC Insurance and your General Liability with XYZ Insurance, this means that you will have to send two certificate requests for every one request you receive. Ask yourself, is this really worth the hassle?

3.) When splitting up your insurance book between brokers, there could be level of service that is lost. For instance, I recently moved an insured over from a competitor of mine. One of the things I like to do for my insured's is a comprehensive experience modification review for workers compensation policies. I noticed right off the jump that something was wrong with their experience modification - it was very high, not warranted and increased their premium. The previous broker never caught this because he didn't include experience modification review in his list of services.


In my opinion, most often then not, splitting your insurance book of business can do more harm then good. You risk the chance of gaps in coverage, the inconvenience of having to request two certificates from different brokers, the possible loss of service or insurance review from an alternate broker....the list could go on and on.

The bottom line is when you do decide to go with a particular broker make sure the renewal process is clearly laid out, discuss action plans for your particular insurance placements and decide whether or not the hassle of having two insurance brokers is the right decision for your business.