The Role of the Commercial Insurance Broker in Risk Management


An insurance broker acts as an intermediary for the customer seeking insurance coverage. Commercial insurance brokers act for businesses looking for enterprise insurance solutions. There are a wide variety of complex solutions available in the field of small business insurance with diverse fields like oil and gas, shop, and marine insurance. Businesses may not have the specialized knowledge that a broker can bring to the table regarding risk management. The commercial broker advises the customer on the optimum type of insurance coverage required.

Identifying Business Risks

Commercial insurance brokers help customers assess and understand business risks. They can also suggest ways and means to reduce risk. Some of these measures are automatic alarm devices in buildings, anti-theft locks in vehicles, fire and safety measures in workplaces, and so on. For businesses with a large fleet of vehicles, they can identify the old and aged vehicles which have a lowed asset value and issue low value premiums for them. By reducing such identifiable risks, commercial insurance brokers in Colorado can then help customers save on insurance premiums. However, when there are risks which are too complex to be mitigated by customer measures alone, insurance policies may be suggested to the customer for risk management. If there is damage to the asset by any unexpected event, payment from the insurer will help the customer tide over the loss.

How a Commercial Insurance Broker Works

Commercial brokers work for the clients and act on their behalf to deal with various insurers. They conduct a consultation and risk assessment to understand the specific insurance requirements of the business. They can advise clients on risk mitigation strategies which can reduce their insurance premiums. They also collect the customer information and premiums so that the insurer can issue the policy. After the customer is issued the policies, brokers can also amend the policies if required during the policy term. Customers can also ask for guidance from the broker in case of a claim.

Skills of Commercial Brokers

Commercial insurance brokers in Colorado bring specialized knowledge of the insurance sector that clients may not always have. They obtain training and certification along with their work experience to understand the customer’s requirement. They keep themselves updated by attending insurance industry events and seminars and subscribing to the industry publications. Particularly commercial insurance products are quite complex and require thorough knowledge. As there are a multitude of insurance options available in the market, the customer may not be aware of all the alternatives available to her. The commercial broker with his wide knowledge can suggest the right insurance for the business. They are also able to get effective rates from insurers as they can negotiate with insurers and suggest ways and means which the customer has employed to reduce risk. In case of a claim or a dispute regarding product terms and conditions, the broker can step in and help the two parties reach a satisfactory resolution. In case a change is needed in the policy terms and conditions because of an increase or reduction in risk for the customer, the broker can suggest amendments in the policy, which will provide the right coverage to the policyholder.

How to Select the Right Broker

The selection of a commercial insurance broker in Colorado depends on the size and requirements of the business. There are brokers who offer specific industry-based products like farm and crop insurance, or property insurance. Other brokers may be large corporate firms which offer a large range of solutions to a wide number of clients. Brokers with experienced, trained and certified staff are always a plus as they can offer professional service to customers.

Small businesses can get in touch with a commercial broker by conducting an online search. The brokers also advertise on television, the internet and local publications. Customers can meet the broker representative face to face, over the telephone or by email. They can request quotes for their insurance needs from the brokers and decide if they wish to take up the coverage from them.

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