By Rebecca Shafer, JD - November 2010

"Finding a new insurance agent for your workers compensation and other insurance coverage can pose some significant issues."

Whether you are a new company just getting ready to start business or an existing company not satisfied with the level of service you are receiving from your insurance agent, finding a new insurance agent for your workers compensation insurance and other insurance coverage can pose some significant issues. The following is a guide on how to find, select and hire your new insurance agent.

1. Determine the Type of Insurance Agent You Need
   The size and geographical spread of your business is a primary factor in hiring the proper insurance agent. If you are an international company than you need an international brokerage firm able to place coverage not only for your local facility, but also for your overseas locations. If your business is concentrated in one region of the country, a regional broker would be a proper fit. When your company is at one location, a local insurance agent who knows and understands the local market will be the best fit for your company. [For the purpose of this article, we will consider the small company with one or a few locations].
2. Determine the Role of the Insurance Agent Before Searching
   You should consider what role you want the agent to play. You will need to determine if you or someone else within your company will deal with the insurance carrier, or do you want the agent to be the intermediary with the insurance carrier. You should also consider how involved your company will be in the work comp claim handling. Consider whether you want the agent to deal with the insurance carrier on claims or whether your company will deal directly with the insurance company. (We recommend your company deal directly with the insurance company, thus allowing you some input into the claims handling process.)
3. Identify Potential Insurance Agents
   There are various ways of identifying insurance agents with whom you may wish to do business. Your contacts at other businesses whether vendors, suppliers or customers can provide you with the names of insurance agents who have provided them great service at a fair price. If you are a member of any professional associations or trade organization, the association or organization often has compiled a list of insurance agents knowledgeable in your field.
4. Interview the Potential Insurance Agents
   When you have compiled a list of three to five recommended insurance agents, meet with each one to learn more about them and their expertise. If your company is large enough, consider a selection committee with input from the financial and operations areas of your business.
   
   Ask interviewees these basic questions:
   1. How many years the agent has been in business?
   2. What experience does the agent have with workers compensation in your state?
   3. How much market volume does the agent place each year?
   4. How many companies does the agent represent? (If the agent is a captive agent representing only one company, his recommendations will be limited to that company. If the agent is an independent agent, she will represent several companies and can select the best option from those companies.)
   5. What is the marketing plan to get your company the best possible insurance premium cost?
   6. What are the premium payment options? (Payment options can vary from monthly pay-as-you-go programs to quarterly payments to annual premium payments.)
5. Check the Agent's References
   The insurance agents you interview should be willing to provide you with references from other companies who have done business with the agency, preferably in your industry or field. You should contact the current clients of the agent for their evaluation of the agent's proficiency and their recommendation on whether or not to consider the agent.
6. Check Out the Insurance Carrier
   The agent should advise you who the insurance company will be where your workers' compensation insurance coverage will be placed. Find out the A.M. Best rating for the insurance company's financial strength. You want the insurance company to be secure in its financial strength. Select a company with a Superior rating A++ or A+, or an Excellent rating A or A-, or with a Good rating B++ or B+. Avoid companies with a B, C, D, E, F, or S rating.
7. Meet the Account Executive
   At smaller insurance agencies, the agent selling the insurance coverage is also the person servicing the account. If the agent selling the coverage is not the person who will be there after the sale, ask to meet the account executive who will be servicing your account. This person should be interviewed in addition to agent doing the sales presentation.
8. Trust, but Verify
   When you have made a decision on an insurance agent you think would be a good fit for your company, you should check with the state's Department of Insurance to verify the agent's licensing. Then check with Department of Insurance for any complaints against the agent or the agency. If the agent has had regulator problems, it would be wise to move on to your second choice to be your agent, and then check out the record of the second choice with the Department of Insurance.

About the Author
Rebecca Shafer, JD, President of Amaxx Risks Solutions, Inc., is a national expert in the field of workers compensation. She is a writer, speaker and consultant. Her expertise is working with employers to reduce workers compensation costs, and her clients include airlines, healthcare, printing/publishing, pharmaceuticals, retail, hospitality and manufacturing. All of her clients have reduced their losses 20-50%.

Copyright © 2010 Amaxx Risk Solutions, Inc.