A wholesale commercial lines brokerage company is an organization with the purpose of connecting businesses to commercial lines insurance plans that are right for their specific industry needs. Matching the brokerage firm to the business it will service is a matter of careful consideration that must be applied by the business owner or employee responsible for insurance obtainment. Factors such as plan offerings and brokerage rates are dominant points of deliberation when choosing, as are location, communication and availability, and customer service.
Middlemen are often deemed unnecessary by savvy business people. The “do my own research” mentality is strong with many entrepreneurs and corporate executives. A wholesale brokerage is not a middleman that should be set to the wayside however. Brokerages offering wholesale insurance from non-state-licensed providers, themselves hold a surplus lines license. This license allows the broker to offer plans from other states to businesses in the purchasing state. Because of this, competition for specialty surplus lines is increased and may provide a nice price reduction for purchasers. Also, coverage otherwise unavailable to certain industries in one state may be accommodated by an out-of-state provider.
Wholesale commercial lines brokerage companies are important for many industries in America. State laws and licensees surrounding insurance can often be prohibitive and brokerages holding a surplus lines license are convenient workarounds for this problem.