INSURANCE: How To Choose an Agent

First, understand the difference between captive and independent agents. A captive agent sells one company's insurance products. An independent agent represents an average of eight companies, which should allow him to combine coverages and service to meet your insurance needs and price target.

Then, consider your insurance agent as a new business partner. For example, look for someone who understands your business, the types of products sold, services offered and competitors.

Gather referrals from trade associations or colleagues. An industry trade association is a good place to seek insurance help or guidance. Also look for agents at trade shows, and ask other industry associates for their recommendations.

Check an agent's credentials and experience. There are many industry designations that signify an agent's level of expertise and demonstrate a strong professional commitment. For example, ARM stands for Associate in Risk Management.

Consider your company's size and agent's size. If your business has multi-state operations, choose an agent who also operates in more than one state and is equipped to provide services, such as loss control assistance.

Ask for references, then call them. Through references, find out whether a potential agent has experience in your industry.

Contact your state insurance department for a list of insurance agents who have had complaints filed against them. Also use the state agency to verify an agent's license.

One sign of a top-notch agent is whether he asks many questions concerning your business and insurance needs. He also should be able to carefully explain policy details, including limitations and exclusions.

Additionally, it might be helpful to ask a potential agent:

What steps does the agency take to deliver insurance quotes quickly?

How does the agency ensure that claims are handled properly?

What insurance companies does the agency represent, and what are these companies' financial ratings?

Does the agency protect itself against errors and omissions that it makes with proper liability coverage?

Will insurance be rebid regularly to obtain improved costs and coverage?