By Robert Elliott - November 2008

"When selecting a broker, biggest isn't necessarily best."

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One of the most important decisions a company makes is selecting their insurance broker. Most large companies have brokers rather than agents so they can obtain coverage from a number of different insurance carriers rather than just one. An agent is a representative of one insurance company.

Some key questions to ask prospective brokers are:

1. How will they structure your company's insurance program?
2. How will they market your company to the insurance carriers?
3. How creative are the individuals on the team -- can they provide examples of how they have enhanced another company's insurance coverage and reduced the insurance costs to make the program more cost effective?
4. Who is the team that will service your account?
5. Do they have experience in your industry?
6. Does the firm have global capabilities (necessary if your company has operations outside the US)?
7. Do they have a timeline of all activities they propose?
8. What are the firms capabilities in the following areas:

9. Claim Advocacy - claim specialists to help difficult claim situations
10. Claim Reviews - reserve, claim closure and best practice reviews
11. Loss Control - specialists to help develop strategic plans:

• Ergonomics specialists
• Repetitive Motion Injuries specialist
• Loss Trend Analysis
• Slip & Fall Prevention
• Air Quality Programs
• Lock-out/ Tag-out Expertise
• Safety Consulting on key OSHA Requirements
• Safety Culture Consulting

12. Post-Loss Cost Containment - systems to reduce Workers' Comp costs
13. Insurance Policy Review
14. Coverage Analysis
15. Certificate of Insurance Distribution

16. RIMS Capabilities (Risk Management Information Systems)?
17. Do they have experience with your existing carrier?
18. Fees and remuneration -- are incentive-based options possible?
19. Do they have captive affiliates?
20. Do they have industry groups for your industry?
21. Are there other services that differentiate their firm?

These are some of the things you will evaluate when selecting the best broker for your needs. The biggest broker isn't necessarily the most qualified for YOUR situation, so meet with several to make sure their capabilities meet your needs.

About the Author
Robert Elliott is a senior risk consultant who specializes in workers' compensation cost containment. His articles have appeared in many risk management business journals.

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