For many years, insurance agents and brokers have worked side-by-side with payroll service providers, cooperating and combining their separate skill sets for the benefit of their small business clients.
In recent years, as competition tightened across the board, we have seen an increasing movement on the part of payroll service providers to offer services and products and solutions that have traditionally fallen under the purview of the insurance agent.
Payroll service providers in many cases bring the advantages of economies of scale and a seamless integration with payroll software currently in place. After all, it’s their program!
And so we are seeing payroll providers call on business owners to offer things like workers compensation quotes, business and umbrella coverage, and other basic programs.
But insurance is much more than a matter of providing a quote. The most suitable plan for small business owners is rarely the cheapest. Insurance planning is a matter of using multiple insurance products and solutions in combination to protect the unique risk profile of the client – whether that client is a business, the business owner, or an employee and his or her family.
It’s a matter of core competencies. Payroll service providers are experts at efficiently moving dollars between accounts via sophisticated computer programs. But very few payroll providers understand your people like an experienced insurance agent.
By the time a typical insurance agent becomes a multi-line benefits broker with a sizeable small business clientele, he or she has generally done hundreds, if not thousands, of detailed fact finders not just with business owners, but with workers just like your employees and families just like those of your employees – at the individual level.
He or she has asked them what happens if the breadwinner dies tomorrow? What happens if the breadwinner or a stay at home spouse becomes disabled tomorrow? How will college be funded? How will the healthy spouse, or a surviving parent, continue to work and manage child care and home duties at the same time?
Asking these difficult questions at the individual family level, and sensitively designing insurance solutions for your workers families as well as for your own needs as a business owner or principal.
There is nothing in any payroll company’s list of core competencies that is a substitute for what insurance agents do best – protect people.
Another core competency is in the area of specialty lines – some of which few people outside of veteran property and casualty agents have even heard of.
Is your business in an antique building? Do you need specialized errors and omissions coverage? Do you have unique concerns about wildfires, flooding and contents coverage? Directors and Officers liability? Do your employees ever drive their own cars on company business? If the answer to any of these three questions is “yes,” you may need some special underwriting attention from a veteran agent who has shepherded cases through underwriting and managed claims many times before, at multiple insurance carriers.
That’s when your relationship with your insurance provider matters the most – when the chips are down and everything is in crisis and when all seems lost. When you pick up the phone, do you want to call the agent who lives, eats and breathes insurance? Or do you want to talk to someone for whom insurance is merely a sideline to their payroll processing business.
The difference is clear – when the claim is on the line, you want an insurance professional handling it. Not a payroll vendor.
by Mike Braun, Leading Times Insurance, LLC 610-427-8122