Empower Yourself: Use an Independent Agent

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By Jeff Grady

In these tough economic times, insurance consumers are searching for ways to reduce costs and save money. It’s no different for physicians, many of whom may be looking to shop their professional liability insurance. When consumers shop around, carriers must compete for their business; that’s good for consumers. That advantage may be lost, however, when you purchase insurance from a company that can only offer one product.

Independent insurance agents and brokers have an advantage: They have access to multiple medical malpractice insurance companies in Florida, which enables them to help buyers compare and find the right balance to between coverage and affordability.
Market conditions change, and independent agents have the experience necessary to navigate through a turbulent market. Small, newly formed, or inexperienced companies often suffer as the market conditions change. One relationship with one direct insurance provider will likely not sustain you over the long haul; you need a broker who can minimize the ups in a tough market and capitalize on competition whenever possible.
Because professional liability insurance protects health care providers against allegations of malpractice, it can be the most important insurance a physician will ever buy. Most medical professional liability policies need approximately five to six endorsements to ensure proper coverage. If you haven’t made a detailed comparison of your insurance contract, you need a licensed professional agent to assist yourself.
Before you buy direct from a single company, ask yourself:
Do you understand insurance company financials and what they mean or how to determine the long term solvency of a market? If you can’t explain why or how a company can go from being “A” rated to bankrupt, then you need an agent to oversee your insurance program.
Do you know the difference between a Demotech “A” rating and an AM Best “A” rating? If not, then you need a professional agent.
Do you know why an insurance carrier needs reinsurance to remain solvent, or how to determine if a company has adequate reinsurance? If not, you need a professional agent.
Your agent is your eyes and ears. You will pay less by consistent marketing, competition, and negotiation on your account. Your policy form will be heavily enhanced by your agent, and you will have another insurance company to go to when your current carrier isn’t the best option.
Whether you buy direct or work with an independent agent, make sure whomever you deal with is licensed. Never rely exclusively on the advice of a 1-800 call center when professional liability coverage for your practice and your future is at stake. Be sure to ask for the representative’s license number, and report any violations by calling the Department of Financial Services Fraud Hotline at 1-800-378-0445.
Remember, because independent agents are not employees of just one company, they don’t make one red cent if they don’t make the sale. Don’t be fooled by companies that imply agents are trying to get you to buy more than you need just to increase their commission. The fact is, agents want to get you the best coverage for the best price; they would simply not risk the sale by doing it any other way.
What matters when you get sued is whether you’re protected; and, what matters before you get sued is the peace of mind that you are protected. You can’t have either one if you don’t shop and working with an independent agent allows you to do just that.
Jeff Grady is the president of the Florida Association of Insurance Agents, a nonprofit state trade association of insurance agencies affiliated with the Independent Insurance Agents and Brokers of America, Inc. He can be reached at (850) 893-4155 or [email protected].