Have you ever been approached by a new agent or broker that is trying to earn your business? Have they suggested a Broker of Record letter or a BOR to move your policies? If you aren’t familiar with insurance terms, you might not know what all it entails and how it could benefit your business.
What Does Broker of Record Mean?
1. At its simplest terms, all a Broker of Record does is transfer the servicing rights from one broker to another. As such, the new agent will be allowed to issue certificates and make policy changes such as adding vehicles and endorsements through the new broker agency.
2. Depending upon the insurance company, the new broker will have to fill out a new application. Often the insurer does this to make sure your new broker truly understands your business. Since, the new agent will be held accountable for any mistakes on your policy, a thorough understanding of your unique company are essential to understanding any exposures you might have that were not identified by your previous broker.
How Does it Affect My Current (incumbent) Agent?
1. Should you decide to allow a Broker of Record change, your current insurance agent will get a notice from the insurance company that you’ve chosen to move your policies to another agent. The incumbent agent will have between 5-10 business days to try and win you back or they can waive the waiting period.
2. If you have any reservations about the agent not being rightly compensated, rest assured as they will still get paid on your policy until the policy renews.
Why Would a BOR Be Necessary?
1. One of the main reasons to sign the Broker of Record letter is because you don’t feel you’re getting the level of service you feel you should be getting. Once that relationship is broken with your current agent, there is no going back. You need to move on. Oftentimes, companies become frustrated with their current agents following poor processing of certificates, unrecognized/uncovered risks, or claims that are not handled in a timely or effective fashion. It is important to understand that struggling to work with your insurance company is not the norm, there are agencies that can provide you with the quality of service that you deserve.
2. When looking for insurance, some businesses have a very limited number of insurance companies that are willing and able to insure them. In recent years, insuring legitimate businesses in the new legalized marijuana space has been a great example of an industry with very few carriers available. Maybe your business is risky or you’ve had claims or you need specific wording for a particular contract. In such cases, doing a Broker of Record letter can open up different markets and possibilities to better accommodate your business.
Sometimes, in the insurance world, you might with the right insurance carrier, but just with the wrong agent. A Broker of Record letter might just be the right answer for your company to enter a partnership with an agent that is better suited to work with your company in a meaningful and productive way.
Here at Alliance, we take our client's businesses very seriously. If you are unsure your current broker is going above and beyond to routinely offer opportunities to save money or decrease your risks, give us a call. We promise to take a glance at your account on a quick call and spell out your current opportunities that could save you TONS in the long term.
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