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What’s the Difference between a Broker and an Agent?

In the world of workers compensation insurance, the terms “broker” and “agent” sometimes seem like they are used interchangeably. However, they are not the same thing. Here are some of the major differenced between workers compensation brokers and agents.

Training and Education – An agent is more or less a middleman between the customer and an insurance company. Agents are not required to have special training or be licensed. A broker, on the other hand, is required to undergo training and education programs and receive a broker’s license.

Responsibility to Customer – An agent’s primary responsibility is to process insurance forms accurately and in a timely manner. When using an agent, it is the customer who is responsible for determining what level of insurance is appropriate. Workers compensation brokers, by contrast, are charged with analyzing customers’ insurance needs to determine the right level of insurance.

Range of Products – Often, agents work with just a few carriers. Or, in the case of “captive” agents, they can work for just one company. In either scenario, their selection of insurance products is typically somewhat narrow. Brokers, though, often have access to a wider variety of products.

Fee charged – While both agents and brokers typically are compensated through commissions from insurance companies, workers compensation brokers – with their higher level of education and training – might charge an additional administrative fee to the customer.