Web Useful for Insurance, but Agent Is Still Valuable
How useful is the Web as a resource for the insurance needs of small business?
At present the Web works well as a purveyor of information about the insurance needs of small business and as a matchmaking service linking you to agents and brokers who can handle your insurance needs. It works less well as a marketplace for insurance; so far only a few sites allow you actually to buy business insurance online, or at least to apply for it, and they offer only simple coverages.
That will change as time passes. Like other businesses, insurers must cut costs, and they see their distribution system--namely agents and brokers--as both expensive and unwieldy. This means that insurers will probably make more and more of their wares available directly to the business buyer over the Web, starting with the simple coverages and going on to the more complex.
Whether this is good news for business is another matter, of which more anon.
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One of newest and most advanced of the business insurance Web sites is that of EPolicy.com (https://www.epolicy.com), launched last month to sell insurance to small businesses and professionals nationwide. Headquartered in Torrance and led by Donald E. Martin, who founded the insurance brokerage Cal-Surance Cos., and Louis A. Kwiker, former president of Bristol Farms and Wherehouse Entertainment, the Web site brokers simple business insurance packages, workers’ compensation insurance and professional liability coverage from insurers such as Fireman’s Fund, Kemper, TIG and Interstate.
The site takes you through the entire process of insuring your business without setting eyes on an agent or broker--applying, comparing quotes, paying your premium (via credit card), and even downloading and printing out your policy.
The Web site of E-insure (https://www.e-insure.com) goes almost as far. At present E-insure acts as an intermediary matching you with agents who can place your coverage, but within a month the company hopes to enable you to buy a wide variety of insurance online, including general liability coverage, excess liability, umbrella insurance, workers’ comp and package insurance policies for businesses ranging from abortion clinics to zoos.
BuyerZone.com (https://www.buyerzone.com) is an “info-mediary” Web site seeking to probe your business insurance needs, eliciting preliminary quotes from specific insurers and helping you research and compare their coverages. That done, the site puts you in touch with agents and brokers who can place your business. BuyerZone offers similar buying services for a variety of other business needs including office equipment and supplies, furniture and the like.
Three other sites--EBDirect (https://www.ebdirect.com), Ebix (https://www.ebix.com), and InsWeb (https://www.insweb.com)--offer info-mediary services for employee benefits coverages including medical, dental, vision and disability insurance from a variety of carriers. They do not handle property or casualty coverages.
On a more general note, a number of insurers maintain good Web sites, many of them linking you to agents or brokers who can handle your purchase. Among the most useful of these:
* The small-business Web site of AIG (https://www.aigdirect.com/small--business--/small--business--index.cfm), which offers clear explanations of a number of coverages important to small business.
* Fireman’s Fund (https://www.the-fund.com), whose site map links you to excellent discussions of business insurance coverages ranging from commercial auto to surety bonds.
* CNA’s products and services page (https://www.cna.com/cna/html/p-s.html) from which you may jump to other pages detailing the company’s insurance and risk management services for businesses and professionals.
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A word of caution, however: The Web is becoming a useful intermediary between business and the insurance industry, but don’t take that to mean that you can do away with the services of a seasoned insurance agent or broker, especially if you run a growing company.
Why? Because even if the Web saves you time and trouble and maybe even some money, as your business grows, so does your need for solid advice from an experienced insurance agent or broker. Indeed, agents and brokers often serve as de facto risk managers, helping many a business identify and assess risk and, where appropriate, shift it to an insurer in exchange for a premium.
Insurers complain about the costs of the agency system, but they also rely on agents and brokers not only to help their underwriters judge risk but also to make sure that businesses don’t go without important coverages. If you make consumer products, for example, you may need both product recall insurance and product liability insurance, and without the advice of an agent or broker experienced in these matters, you may end up with coverage not specific to your risk or, worse, no coverage at all.
In plain English, insurers need agents and brokers, and after a point, so does business. The agency system provides the insurance industry with a measure of safety, not to mention premium dollars it might not otherwise get. It provides business with advice it ought not to do without. Don’t let the efficiencies of the Web persuade you otherwise.
Juan Hovey can be reached at (805) 492-7909 or at jhovey@gte.net.
