Insurance Agents work for insurance companies representing them and selling the insurance products and covers of the insurance company they are tied-up with. An Insurance Agent can utmost work for 3 insurance companies – One Life Insurer, One General Insurer and One Health Insurer. Due to this aspect, they will be able to present the premium quotations of only one Insurer in each category.
 
On the other hand, an Insurance Broker works for a Client, representing the client and helping them identify their operational risks, profiling the same and help the client understand options, find the best fit across multiple insurers, handle paperwork, and assist with claims, acting as the client’s advocate before the claims processing authority in the Insurance Company.

Insurance Brokers assess their clients’ risks and profile them to present it appropriately before the insurers’ underwriters who typically decide on the premium based on the risk information provided. For commercial businesses, the responsibility of providing all the risk information lies with the customer/proposer/insured. So, it becomes very essential to have an expert (an insurance broker) on their side to profile and present their risks, without any gaps in proposal information, to the insurer. The Insurance brokers shop the market with a client’s mandate for competitive rates/terms, and present options, saving client’s time and money by leveraging the best solution.

The premium calculated by the underwriters will depend on the exact risk information shared with them. Based on the risk information provided, the underwriters will quote the premium based on the nature of risks, their experience in each specific risk parameter and their internal underwriting guidelines. So, the quoted premium from every insurer for each and every risk is bound to vary. Since, the underwriting guidelines are dependent on the present claim experience of insurers, the premium quotes are also likely to be dynamic in many categories of insurance covers, more specifically, during every year renewal of the insurance policy. The above premise emphasizes the fact that the process of comparison of premiums needs to be done every year during renewals.

The cheapest insurer may not provide all the coverage required. The premium could be less because the coverage is less. So, it is always prudent to compare the ‘PRICE versus COVERAGE’ offered among multiple insurers to finalise your insurance policy. It is also important to focus on finalising the best combination of coverage, service and reliability.

The insurance broker who is mandated by the client for the specific insurance policy placed through them will provide support and guidance to the client and coordinate with the insurance company for timely and satisfactory claim settlement. The insurance broker, like an advocate, works on behalf of the client, negotiates with the insurance company to ensure fair and timely claim settlement.

As per the fundamental principle of loss minimization in Insurance, it is the client’s duty to do all in his/their capability to minimize the loss that is happening. For example, if a fire is happening in the insured property, the client should do all that is required to put down the fire, like using fire hydrant systems, fire extinguishers and calling for fire-fighting professionals immediately. It is also pertinent that the client must take reasonable steps to be prepared for such loss events, prevent or minimize loss when the loss incidence is happening. For example, depending on the nature of business and operations, the client needs to ensure availability of fire fighting equipment and fire safety procedures in place during normal operations, so that, if any loss incidence is triggered, they have all the equipment and capability to mitigate the loss.