Insurance Brokers: Protecting Your Salespeople

Insurance brokers and salespeople are licensed professionals who help businesses and individuals get insured. They can either work full-time for an insurance company or as independent contractors. While insurance brokers are not necessary for everyone, they can save their clients time and money by finding insurance policies that best fit their needs.

Brokers can make money through commissions or broker fees, or both. Most states require brokers to disclose commission rates and other fees upfront. They are usually paid a percentage commission on the policies being sold, which varies based on the policy and company.

Insurance brokers are often confused with independent agents. While both work with multiple companies and earn a commission, independent agents make their money entirely from commissions and represent insurance companies, whereas brokers represent the buyer.

Errors and omissions insurance

It is important to note that errors and omissions insurance typically does not cover intentional wrongdoing, criminal acts, or punitive damages. Additionally, policies may include specific exclusions or limitations, so it is essential to carefully review the terms and conditions of the policy.

Brokers should also be aware that errors and omissions insurance usually operates on a claims-made basis, meaning that the policy must be in effect at the time the claim is made, not just when the incident occurred. This can be an important consideration when deciding on the appropriate level of coverage and the duration of the policy.

In addition to errors and omissions insurance, brokers may also want to consider other types of insurance to protect their business and salespeople, such as general liability insurance, cyber liability insurance, and workers' compensation insurance, depending on their specific needs and requirements.

Workers' compensation insurance

Brokers who specialize in workers' compensation insurance have access to a diverse group of insurance carriers and programs. They use their expertise and relationships to negotiate better prices and ensure proper employee classification, which is crucial for small businesses to avoid overpaying for coverage.

When shopping for workers' compensation insurance, it is essential to consider the specific requirements of your state and the unique needs of your business. By working with a knowledgeable broker, businesses can ensure they are compliant with state regulations and have adequate coverage for their employees.

Commercial auto insurance

There are several factors that influence commercial auto insurance rates, including the driving records of the individuals operating the vehicles, as well as external variables like industry regulations, market trends, and insurance industry dynamics.

Businesses that commonly require commercial auto insurance include transportation and delivery services, construction companies, retail businesses with delivery vehicles, and professional services that require vehicles for operations.

Cyber liability insurance

The cost of cyber liability insurance varies depending on factors such as the company's exposure to cyber risk, the amount of coverage needed, revenue, network security, and the number of people with access to the systems and data. According to Insureon, the median cost of cyber liability insurance for small business owners is $145 per month.

General liability insurance

• Bodily injury: If a client or any other individual sustains an injury while at your place of business, general liability insurance can cover their medical costs. This includes injuries that occur on your premises or due to your operations, regardless of who is at fault.
• Property damage: If a salesperson accidentally damages a client's property, such as spilling coffee on a laptop, the policy can cover the cost of repair or replacement.
• Personal injury: If a salesperson is accused of damaging someone's reputation through slander or libel, general liability insurance can cover the associated legal and settlement costs if they are found liable.
• Advertising injury: This includes accidental use of copyrighted or trademarked material in your advertising. It also covers electronic data liability, protecting against losses from computer-related attacks or data loss.

Frequently asked questions