Purpose of Insurance Brokers
Brokers and agents are the retail side of insurance. Some insurers underwrite insurance only through brokers, who obtain raw data from layman customers and fill in the complex forms which insurers need in order to thoroughly assess the risk they are being asked to underwrite. Some jurisdictions have special rules about how policies must be printed, assembled, and delivered to insureds, and brokers are responsible for such compliance issues.
Most importantly, insurance brokers assist prospective insureds with developing risk management strategies appropriate to their risk profiles. They work with insureds to find out what kinds of risks they regularly encounter, and educate insureds about what policies are available for each type of risk. Often, an insured may buy a regular policy plus endorsements or additional policies to fill in exclusions in the regular policy.
Insurance brokers also may help insureds obtain multiple layers of excess/surplus lines policies from different insurers over a primary policy, and can work through scenarios for reducing premiums with deductibles or self-insured retentions. For huge risks (e.g., the "slip and fall" risk of a multinational retailer with hundreds of stores), a single policy may not be available to cover the entire risk from the first dollar (or euro) of loss incurred. In the United States, if an insurance broker helps insureds obtain multiple layers of excess/surplus line policies, then the insurance broker also must be licensed as an excess/surplus lines broker.
Read more about this topic: Insurance Broker
Famous quotes containing the words purpose of, purpose and/or insurance:
“A major misunderstanding of child rearing has been the idea that meeting a child’s needs is an end in itself, for the purpose of the child’s mental health. Mothers have not understood that this is but one step in social development, the goal of which is to help a child begin to consider others. As a result, they often have not considered their children but have instead allowed their children’s reality to take precedence, out of a fear of damaging them emotionally.”
—Elaine Heffner (20th century)
“... the word “education” has an evil sound in politics; there is a pretense of education,
when the real purpose is coercion without the use of force.”
—Hannah Arendt (1906–1975)
“The Republican convention, an event with the intellectual content of a Guns’n’Roses lyric attended by every ofay insurance broker in America who owns a pair of white shoes.”
—P.J. (Patrick Jake)