What is the difference between an insurance broker and an agent?

Both Insurance Brokers and Insurance Agents act as intermediaries between the customer and insurance companies. Brokers and agents are both licensed to arrange insurance policies and required to abide by the laws or regulations.

The key difference between insurance brokers and insurance agents is 'Who They Represent'.

Insurance brokers represent You, while insurance agents represent one or more insurance companies.

Unlike brokers, insurance agents do not have a fiduciary duty to the client. Their allegiance is to the insurance company or insurance companies they act for. Agents can explain policies or present different options if they are working with a few different insurance companies, but it is ultimately up to the consumer to ensure that the insurance meets the needs of their business.

It is the job of an Insurance Broker to know the details of what is included and excluded in various insurance products. This knowledge enables insurance brokers to find the most appropriate insurance solution and what will best aligns with a client's needs and requirements. This information might otherwise be overlooked, ignored, or have been confusing. For this reason an Insurance Broker will go into more detail to gain a better understanding of your business and the insurable risk exposures, so as to be able to present this information to various Insurers and Underwriting Agencies. The Insurance Broker will then review the terms and conditions and present the most suitable options, highlighting the important information that the client should consider.

The Insurance Broker is the main point of contract through any changes of cover ands to guide you through any claim.

An Insurance Agent can only provide you with General Advice that does not take into account your personal objectives or needs. The insurance agent may not point out exclusions or gaps in cover, and differences between theirs and other insurance policies. They may only ask sufficient questions required to quote, but my not otherwise understand the full extent of the risk. The consumer will need to be familiar with the policy and comfortable that it covers their risk. All changes and claims will need to be managed by the consumer.