A good broker selection process for an acquired company is short and structured: set your criteria first, send the same documents and questions to two or three candidates, score the written answers, check references and decide by a date tied to your renewal. It is a light version of a request for proposal (RFP), sized for a small company, and it chooses a broker, not a premium. You compare premiums later, when the chosen broker shows quotes for matching coverage. This guide is for new owners, including entrepreneurship through acquisition (ETA) searchers, Small Business Administration (SBA) borrowers and holding company operators, who want a written record the board can read.
The short answer
- Decide what matters before you meet anyone. Write four to seven weighted criteria, plus must-haves such as licensing.
- Send the same documents and the same written questions to two or three firms, including the incumbent if it is a candidate.
- Score answers against the criteria, not the pitch. You are choosing a broker, not a premium: compare how clearly each firm explains pay and fees now, and compare premiums for matching coverage after you choose.
- Do not let several brokers approach the same insurers for your account at once. Some insurers will deal with only one broker on an account at a time, so ask each candidate how it handles this.
- Decide by a date set around your renewal, check references, and plan the handover before you announce the choice.
Do you need a formal selection process at all?
Not always. A buyer with one location and a simple program may decide after two or three conversations using a written question list. A buyer with several entities, a lender, investors and an add-on plan usually benefits from a short formal process, because the choice affects service, reporting and cost for years.
| Your situation | A light process fits when | A fuller process fits when |
|---|---|---|
| Size and complexity | One entity, one or two locations, standard lines | Several entities, locations or states, or specialty lines |
| Lender and investors | One lender with standard clauses | Lender covenants, a board and reporting to investors |
| Timing | Renewal is near and the incumbent fits | Renewal is months away and you can compare calmly |
| Plans | Operate the business as is | Add-ons, new locations or an exit within a few years |
If you are still weighing whether to keep the incumbent at all, start with the seller's broker vs your own broker, and for timing see when to change brokers.
What criteria should you set before you talk to anyone?
Write the criteria first so the best presentation does not decide for you. Typical criteria for an acquired company:
- Fit with your industry and deal type. Experience with similar operations, contracts and lender terms.
- Market access. Insurers it can reach, including specialty options, and its reasoning.
- Onboarding plan. A dated plan with deliverables. See what broker onboarding should look like.
- Claims and certificate service. Named people, written turnaround and advocacy on a disputed claim.
- Transparency on pay and fees. How it is paid, whether pay varies by insurer, volume or profit, and any fees. See how insurance brokers get paid.
- People, continuity and reporting. Who will work on the account, what happens if that person leaves, and what you will receive for your board, lender or investors.
- References. What owners in a similar situation say about the first 90 days, certificates and claims.
- Licensing (must-have, pass or fail). An active license in your state for the line and, where relevant, surplus lines.
Agree on any other must-haves, such as a named backup contact. A candidate that fails a must-have drops out before scoring. That leaves seven scored criteria. For a deeper question set, use questions to ask an insurance broker.
What should you share, and what should you ask each broker in writing?
Share what a broker needs to propose a plan, not everything you hold. A starter package:
- Declarations pages and, if available, full policies and endorsements. See what documents you need for an insurance review.
- Loss runs for the last several years. See loss runs.
- A one-page description of the business, entities, locations and deal structure.
- Payroll by role or class, vehicle and driver counts, and major equipment, in summary form.
- Key contract insurance clauses and lender insurance requirements.
- Renewal dates and the timeline you want.
Hold back personal details such as Social Security numbers, driver license numbers and individual salaries until a firm is chosen or an insurer needs them. Ask candidates to treat the package as confidential and ask the seller for written permission before sharing seller documents. Your purchase agreement may address access to records. Ask deal counsel what you may share with candidates before and after closing, and what confidentiality terms to use.
Tell every candidate one rule: do not approach insurers about this account until you choose. Some insurers will deal with only one broker on an account at a time, and practice varies by insurer, so ask each candidate how it handles this. Several brokers requesting quotes for the same business can create conflicts and muddy the comparison. Ask each candidate to describe its market plan instead of running it, and move to quotes after you choose, using a broker of record letter if needed. See broker of record letters.
Because no quotes exist at this stage, this process chooses a broker, not a premium. Compare premiums after you choose, when that broker takes the account to market and shows quotes for matching coverage. If you do want quotes before you choose, assign each candidate a different set of insurers in writing, or let the incumbent market the renewal, and compare later.
A request for proposal is just a set of written questions. Keep it to one or two pages and ask for answers in the same order for every firm. This is the short written version. The full set, with what good answers sound like, is in questions to ask an insurance broker after buying a business.
- Describe your role in this sale and which insurers you hold agency contracts with.
- How will you be paid on this account? List fees, any pay that varies by insurer, volume or profit, and what you would expect to earn on the quotes you would show us. Do you or an affiliate have an ownership interest in any insurer you would approach?
- Which insurers would you approach, and why those?
- Describe your first 90 days with us, with deliverables and dates.
- Who will work on the account? Give names, roles and the backup for each.
- How do you handle claims, including disputed claims?
- How do you issue certificates, and what turnaround do you commit to in writing?
- What have you done for an owner who bought a similar business with a lender, described without client names?
- What would you want to know about the current program, and how would you decide what, if anything, to change for our business and lender?
- Provide two references from owners in a similar situation, with their permission.
- Give the license numbers and National Producer Numbers (NPN) for the firm and the people who would work on our account, for each state where we operate.
Do not ask for premium numbers at this stage. A premium for different limits or deductibles cannot be compared. Ask for fee terms and how the firm would show you alternative quotes later. To see how quotes are handled at renewal, see how to remarket an inherited insurance program.
How do you score the answers?
A scoring grid keeps the decision about the criteria. Score each firm from 1 to 5 on each criterion, multiply by the weight, and add. The best possible total is 500, so divide the total by 5 to get a score out of 100. The weights below are an example. Use your own, and agree on them before you read answers.
| Criterion | Example weight | Broker A (1 to 5) | Broker B (1 to 5) | Broker C (1 to 5) |
|---|---|---|---|---|
| Fit with industry and deal type | 20 | |||
| Market access and reasoning | 15 | |||
| Onboarding plan and deliverables | 15 | |||
| Claims and certificate service | 15 | |||
| Transparency on pay and fees (how it is paid, any fee, any pay that varies by insurer, volume or profit) | 15 | |||
| People, continuity and reporting | 10 | |||
| References | 10 | |||
| Total | 100 |
Have two people score separately if you can, such as you and your operations lead or board member, then compare. Look hardest at criteria where scores differ by two or more. Treat a missing or evasive answer as a low score on that criterion, and keep licensing as a pass or fail check, not a scored row. If the fee amount itself matters most to your lender or investors, score the fee terms inside the pay and fees row (amount, what it covers, refund terms) and raise that row's weight, but do it before you read any answers. Premiums are compared after you choose, and a heavier weight rewards a clear explanation of pay, not a lower price. The scorecard informs the decision and does not replace judgment. A close result is a reason to ask one more question, not to flip a coin.
What should you ask a broker's references?
References are a scored criterion, so prepare for the calls. Brokers generally need the client's permission to share its details, so references may take a few days to arrange. Ask each reference specific questions: How did the broker handle the first 90 days? How fast were certificates? What happened on a claim? Did the broker explain pay and changes plainly? Ask what the broker could have done better.
What does a sensible timeline look like?
Work backward from your renewal date and your lender's deadlines. This example takes about five weeks and can be compressed.
| Week | Step |
|---|---|
| 1 | Set criteria, must-haves and weights. Choose two or three candidates. Gather the document package. |
| 2 | Send the package and written questions with a response date. Tell candidates not to approach insurers yet. |
| 3 | Receive answers. Hold one meeting with each firm using the same agenda. |
| 4 | Score the answers. Call references. Ask follow-up questions in writing. |
| 5 | Decide. Tell all candidates. Plan the handover, broker of record letter and onboarding. |
If renewal is close, shorten the process to a couple of weeks or keep the incumbent through this renewal and run the process before the next one. Keep the incumbent working a near renewal during the process so no policy expires while you decide, and remember that a quote is not bound coverage until the insurer confirms binding in writing.
What mistakes should you avoid?
- Choosing on price signals alone, such as the seller's last premium or a claim that a firm can beat it. Premiums are comparable only after matching coverage is quoted.
- Skipping the incumbent. If the seller's broker is a candidate, treat it fairly. It may fit well.
- Making a long commitment before service is proven. Ask about the exit terms for any fee agreement.
- Forgetting the handover. Plan the broker of record letter, the lender notice and certificates.
A hypothetical example. A holding company that has just closed its third add-on invites three firms: the add-on's current broker and two others. It sends one package and eleven questions, with a rule that no one approaches insurers yet. Scoring puts the incumbent first on industry fit and service history, and a second firm ahead on reporting and market reasoning. The totals are close, so the company asks both a follow-up question about how they would handle three entities on one program and calls references. It picks the incumbent, whose written answers on the three-entity program were more specific, and sets a review of reporting for the next renewal. The process took five weeks and left a written record the board could read.
If the right answer for you is to stay put, say so to the other candidates and thank them. For a clean change instead, see when to change brokers for timing and handover steps.
Where does Morrow fit?
Morrow is the brand of Afthonea Inc., an insurance agency in Boston that focuses on business insurance. It can respond to a request like this, review inherited policies, flag gaps and request quotes after you choose, and it should be scored on the same grid as every other candidate. It does not issue policies, decide coverage or promise terms, and a quote request is not bound coverage. Morrow is licensed in Arizona, California, Colorado, Florida, Georgia, Illinois, Louisiana, Massachusetts, Michigan, Nevada, New Jersey, New York, North Carolina, Ohio, Pennsylvania, South Carolina, Texas and Virginia only.
You may be better served elsewhere if your business is in another state, if you need life, disability or health benefits advice, or if your program is large and complex enough to need a dedicated service team. Confirm every candidate's license on your state insurance department lookup.
Keep reading
- Questions to Ask an Insurance Broker After Buying a Business
- How Insurance Brokers Get Paid: Commissions, Fees and Disclosure
- When to Change Insurance Brokers After You Buy a Business
- Broker of Record Letters: Switching Brokers Without Switching Policies
- What Broker Onboarding Should Look Like After an Acquisition
- All guides for new business owners
Frequently asked questions
Do I need a formal request for proposal to pick an insurance broker?
Not always. A simple company can decide after a few conversations with a written question list. A company with several entities, a lender and investors usually benefits from a short written process with the same documents and questions for each firm.
How many brokers should I invite to compete for my business?
Two or three firms give enough information for many buyers, including the seller's broker if you are considering keeping it. More firms add work for many buyers without much more information, and several brokers contacting the same insurers can complicate quotes.
Should I tell brokers what the seller paid for insurance?
Share declarations pages and premium history where the seller allows it, since brokers need them to propose a plan. Ask the seller's written permission first. Do not rely on the seller's premium as a target, because coverage and the business may differ.
Can I ask for quotes from several brokers at once?
You can ask for proposals, but ask brokers not to approach insurers until you choose. Some insurers will deal with only one broker on an account at a time, so competing submissions can create conflicts. After you choose, a broker of record letter asks each insurer to recognize the new broker. Timing and the effect on an in-force policy differ by insurer, so ask the new broker what to expect for each policy.
How should I weigh price against service?
In this process you are choosing a broker, not a premium. Score how clearly each firm explains its pay and fees, weigh that against service criteria such as onboarding, claims help and certificates, and compare premiums later when the chosen broker brings quotes for matching coverage. Set the weights before you read answers.
References
- SBA: Get business insurance
- IRMI: Broker
- NAIC: Insurance producer licensing
- State Compensation Insurance Fund: Broker of record process
- Encova Insurance: Agent / Broker of Record Change (June 2021)
Just bought a business? Get your insurance reviewed.
Send Morrow the declarations pages, loss runs and key contracts you inherited. Morrow can review them against the business you bought, flag gaps and request quotes where it makes sense. Any new terms depend on carrier underwriting.
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This article is general information, not legal, tax or financial advice, and not a coverage determination. Coverage depends on the actual policy wording, carrier underwriting, your purchase agreement and your contracts. Ask your attorney and accountant about deal and legal questions.