What Is The Difference Between An Insurance Company And A Broker?

As a small business owner, you may be wondering if you should purchase insurance from an insurance company or through a broker. There are a few key differences between the two that you should consider before making a decision.

An insurance company sells insurance policies directly to customers. A broker, on the other hand, works with multiple insurance companies to find the best coverage for their clients. Brokers are able to compare rates and coverage options from different insurers to get the best possible deal for their client.

Another difference is that brokers are typically independent contractors, while insurance companies have their own employees. This means that brokers are not beholden to any one insurer and can offer impartial advice. Insurance companies, on the other hand, may be more likely to try and sell you a policy that is not in your best interest.

Finally, it is important to note that insurance companies are regulated by state governments, while brokers are regulated by the National Association of Insurance Commissioners (NAIC). This means that there is more oversight of insurance companies than there is of brokers.

When deciding whether to purchase insurance from an insurer or broker, it is important to consider all of these factors. Weigh the pros and cons of each option to decide what is best for you and your small business.