The insurance industry as a whole is a complex world to navigate. So often, the terms insurance carrier and insurance agency are used synonymously, when there are very specific distinctions between the two. Many people are unaware of the differences between an insurance agency and an insurance carrier.
Insurance Agency: a business that sells an insurance company’s products to consumers. An agent helps consumers select the right insurance to buy and handles the transaction on behalf of the insurance company.
Insurance Carrier: the issuer of the insurance policy and the one who charges the premium and pays for losses and claims covered under the policy. Also known as the insurance provider or insurance company.
Knowing the difference in the basic definitions of the two is one thing, but knowing the difference in how they operate and whom you should purchase insurance through is what will set you and your law firm up for success.
As a Renewal Account Executive at Protexure Insurance Agency, I frequently hear attorneys question the difference between an insurance agency and an insurance carrier. This question typically arises when attorneys have claim questions and are unsure of whom to contact. But ultimately, the difference between the two is important to understand when you purchase a professional liability insurance policy.
To help you decide whom to work with for your insurance needs, I will review the pros and cons of buying insurance directly from an insurance carrier and buying from an insurance agency.
When it comes to purchasing professional liability insurance from an insurance agency vs an insurance carrier, the two businesses operate a bit differently.
Insurance agencies are designed to help customers find the best insurance policy to fit their needs. An insurance agency typically works with several insurance policies and programs and will help find the right fit for their client.
An insurance agency knows the market and will compare a variety of insurance carriers and coverage options to get you the best policy for your law firm.
An insurance agency can provide coverage limits, as well as additional coverage options from a variety of insurance programs that will best protect your firm.
When working with an insurance agency you know and trust, you can allow them to do most of the “heavy lifting” for you when it comes to comparing policies and getting insurance quotes.
Due to the nature of this business model, it can take a few days for an insurance agency to collect the information they need to help their clients secure a policy. For those who aren't in a hurry or don’t have the time to compare policies themselves, working with an insurance agency could be the way to go.
For some attorneys, going straight to the source is the strategy they prefer. Rather than working with an insurance agency, some prefer to work directly with an insurance carrier to secure a policy.
Although buying directly from a professional liability insurance carrier may require some upfront research and planning, it can also be the quickest strategy. Insurance carriers can typically provide an insurance quote quickly, some within a matter of hours.
Additionally, Account Executives or Insurance Specialists from an insurance carrier are an expert in the product they are representing. They can answer any and all questions you may have about the policy, including detailed information on renewing the policy and claims handling.
Purchasing insurance through a carrier may be the best option if you know the coverage limits you are looking for and the price you are looking to pay for the premium.
While coverage options and the process of purchasing insurance are significant factors when choosing to work with an insurance agency vs a carrier, there are other factors to consider. Price is a huge driving force for many attorneys when purchasing a policy and choosing whom to work with for their insurance needs.
One major advantage of working with an insurance agency is the number of options you receive. Because insurance agencies work with a variety of insurance programs, in addition to providing multiple coverage options, they are often able to offer a variety of price points.
An insurance agency can also provide ways to help you to reduce your premium. They can provide higher deductible options, remove additional coverage options that may not be necessary for your firm, and reduce limits if your firm’s needs have changed during the policy period.
Both insurance carriers and insurance agencies will be able to work with you to find you the right insurance policy to fit your needs and your budget. But, rather than finding the cheapest program available, an insurance carrier will work with you to adjust their policy, limits, and deductible to find the sweet spot between coverage needs and the law firm’s budget.
Going directly to an insurance carrier can even provide you with discounts or policy additions that aren't available through other channels.
Many hope to never have to contact their insurance carrier or insurance agency outside of their yearly renewal. But, for those who are looking for risk management advice or claims handling services, whom you choose to do business with is crucial.
For those looking for a more personal touch, an insurance agency might be the route for you. Insurance agencies are often smaller than insurance carriers and have dedicated staff to help with securing a policy and navigating policy renewals.
While every insurance agency is different, many find it to be easier to get someone on the phone to answer their questions at an insurance agency than at an insurance carrier. A smaller agency can be nice when it comes to personalized service.
Because insurance agencies are oftentimes small businesses, they may not always have all the resources a large insurance carrier might have. For example, risk management information and claims handling is frequently not provided by the agency itself and instead are provided by the insurance carriers they work with.
Risk information, best practices, and a risk management hotline will most likely be provided to you but it is dependent on the policy and program you choose. An insurance agency can help you get in touch with the right people and resources.
Additionally, if you ever have a claim or potential claim to file, this will not happen through your insurance agency but instead, you will be directed to the insurance carrier your policy is through.
An insurance carrier typically has many resources for their insureds such as a risk management website or a risk management hotline. Insurance carriers are larger businesses and have dedicated team members to creating content to help their insureds navigate challenging situations.
Additionally, insurance carriers will be the ones to help you with a claim or potential claim. While you get this service no matter how you obtain your insurance policy, some prefer to have one number to call no matter what insurance-related questions they have.
The choice of how you purchase your professional liability insurance coverage is up to you and what you are hoping to get out of your policy and program.
If you are looking for a more personalized approach, an agency might be the best option for your firm. On the other hand, if you are looking for a quick turnaround and a one-stop-shop for all your insurance needs, working with an insurance carrier may be the route for you.
Protexure is an insurance agency that specializes in helping small law firms secure professional liability policies. Protexure provides an exclusive program through Crum and Forster as well as offering policies through other carriers.
With Protexure you get the service and personalization of an insurance agency with the quick turnaround and risk management help of a large insurance carrier.