Ask every broker the same five kinds of question: who it works for and how it is paid, which insurers it can reach, what it will do in your first 90 days, who handles claims, certificates and lender paperwork, and who you will actually work with. A good answer is specific, in writing and easy to check. This guide is for new owners, including entrepreneurship through acquisition (ETA) searchers and Small Business Administration (SBA) borrowers, who are interviewing the seller's broker or a new one and want to compare firms side by side.
The short answer
- Ask every broker the same questions, in writing, and compare the answers side by side. Specific beats smooth.
- Start with role and pay: whom the broker represents, whether it can bind coverage, and how it is paid. Then ask about markets, the first 90 days, claims, certificates and the people.
- Good answers name steps, owners and documents. Vague answers name adjectives.
- A hard question is not rude. A broker confident in its work will welcome it.
- The same list works for the seller's broker. Use it to decide whether to keep, supplement or replace.
How should you use this list?
Pick one meeting format and use it for every candidate, including the incumbent. Send the questions ahead, ask for written answers, and share the same documents with each firm: declarations pages, full policies, loss runs and key contracts. See what documents you need for an insurance review.
Short on time? Ask these five. Are you a broker for me or an agent for an insurer? How are you paid on this account? What will I receive in the first 90 days, and when? Who handles certificates, and how fast? Who is my day-to-day contact, and who is the backup?
Keep three habits. First, note the answer and whether it was specific. Second, ask for one example, such as a clause the broker added for a lender on a past deal, described without naming the client. Third, ask for references from owners in a similar situation. If you want a scoring sheet to turn answers into a decision, how to run a broker selection process has one.
Who do you work for, and how are you paid?
| Question | A good answer sounds like | Probe further if |
|---|---|---|
| Are you a broker for me or an agent for an insurer in this sale? | A plain statement of role, and which insurers it holds agency contracts with | The answer is a job title with no explanation |
| Can you bind coverage with any insurer you will quote? | Names which, and where another party must approve | It says "yes" for everything |
| How are you paid on this account? | Commission, fee or both, in writing, with the amount available on request | It will not say, or says "do not worry about it" |
| Does anything vary with volume or profit? | A direct yes or no, and how it is disclosed | The answer changes when you ask a second time |
| What would you earn on each alternative quote you show me, and do you or an affiliate own any part of an insurer you will quote? | A direct answer in writing | It says it does not know |
| Which licenses do you hold for my state and line? | License numbers for the person and the firm, and a National Producer Number (NPN), the identifier regulators use | It cannot give a number |
| Do you carry errors and omissions insurance, and will you show me the certificate? | Yes, with the limit and the insurer named | It changes the subject |
In general industry usage, an agent represents the insurer and a broker represents the buyer, but states define the roles differently and a firm can act as either in different deals. So the answer matters more than the label. For the full pay discussion, see how insurance brokers get paid. Then check each license on your state insurance department's lookup. Many show whether a license exists, and some show the lines it covers, but fields differ by state, and a lookup is a starting point, not proof of good standing.
Which insurers can you reach, and how will you find the right fit?
| Question | A good answer sounds like | Probe further if |
|---|---|---|
| Which insurers would you ask to quote this account, and why those? | A reasoned list tied to the industry, size and claims history | One or two names, and no reason |
| How do you handle business your usual insurers decline? | Explains the options, including surplus lines through a licensed specialist, and the trade-offs | It treats the non-standard market as a last resort without explaining |
| Do you use a wholesale broker or managing general agent (MGA) on accounts like mine? | Says when, who gets paid, and how it affects what you see | It cannot say who sits between you and the insurer |
| Will you quote the same coverage across insurers so I can compare? | Yes, with limits, deductibles and endorsements lined up | It sends proposals that cannot be compared line by line |
| What will you need from me to get good terms? | A short list: loss runs, payroll, values, vehicle and driver lists, a description of the plan for the business | It quotes with almost no information |
A wholesale broker is an intermediary between a retail broker and an insurer and normally has no contact with you. Surplus lines coverage comes from insurers not licensed in your state and is placed by a licensed specialist. In many states it is allowed only after the admitted market has been tried, with exceptions that vary by state. State guaranty funds generally do not protect surplus lines policyholders, so a broker placing you there should say so. See retail broker vs wholesaler vs MGA and admitted vs non-admitted carriers.
What will you do in my first 90 days?
| Question | A good answer sounds like | Probe further if |
|---|---|---|
| What is your process for reviewing inherited policies? | Names the steps: read full policies and endorsements, check named insureds, compare to contracts and lender terms, produce a written gap list | "We will take a look" |
| What will I receive, and when? | A coverage summary, a gap list and a recommended action plan on dates you can write down | No deliverables, only calls |
| On any claims-made policy, how will you check the retroactive date (the policy does not cover wrongful acts before it) and the named insured (the legal name on the policy)? | Pulls the retroactive date for each claims-made policy and the legal names on each policy, and flags any that do not match the entity you bought | It does not mention either |
| What deal facts do you need from me? | Purchase structure, closing date, entities, locations, payroll, contracts and lender requirements | It never asks how you bought the business |
| When would you recommend remarketing, and when waiting for renewal? | Explains the trade-offs and ties them to your renewal dates | It always says "now" or always says "later" |
A strong answer to these maps onto what broker onboarding should look like and the timeline in your first 90 days of insurance. Remember that any quote is not bound coverage until the insurer binds it, so ask how the broker confirms binding in writing.
Who handles claims, certificates and lender paperwork?
| Question | A good answer sounds like | Probe further if |
|---|---|---|
| Who reports a claim, and who follows up with the insurer? | A named person, with the steps from first notice to payment or denial | It says call the insurer. |
| What do you do if the insurer disputes or denies a claim? | Explains how it reviews the policy wording, asks the insurer for its reasons and says what help it offers, without promising an outcome | It promises the claim will be paid. |
| Who issues certificates of insurance, and what turnaround will you commit to in writing? | A named owner and a written turnaround you can check | No named owner, or only "as soon as we can". |
| Who sends my lender evidence of coverage, with its required clauses, at closing and at each renewal? | A named person who checks the clauses on the policy itself, not only on a certificate | It treats a certificate as proof the lender is protected. See why a certificate is not coverage. |
| How do you check my customer and landlord contracts against my policies? | Compares each contract's insurance clause to the program and lists mismatches | It has never asked to see your contracts. |
Lender wording varies by loan, so ask for the loan agreement's insurance clause to be checked line by line. For what Small Business Administration (SBA) lenders commonly require, see SBA lender insurance requirements.
A hypothetical example. A new CEO interviews two brokers with the same list. Broker A answers every question briefly and offers a quote in a day. Broker B asks how the company was bought and which entities hold the policies, requests the full policies and the loan agreement, and names a date for a written gap list. When the CEO asks each for its process for sending the lender evidence of coverage, Broker A says it will handle it, and Broker B names who sends it and how often. A quick quote can be legitimate, so speed alone is not the signal. The CEO weighs both with the scorecard from the selection process, and chooses on fit, not speed.
Who will I work with, and what happens if I leave?
| Question | A good answer sounds like | Probe further if |
|---|---|---|
| Who is my day-to-day contact, and who is the backup? | Two named people with direct contact details | A shared inbox only |
| Who will run my renewal strategy? | A named person who starts well before the renewal date | The renewal appears a few weeks before it ends |
| Do you have experience in my industry and deal type? | Describes typical issues in the industry without naming clients | Only general claims about being experienced |
| How do you report to owners, boards or investors? | Offers a summary of the program, open items and spend | It has no standard format |
| If I leave, who holds my policy records and renewal dates, and how fast do I get them? | Explains the broker of record process and says in writing which documents you keep as the client (copies of policies, loss runs, certificate history) and which stay with the broker, with a timeline | It will not say what you keep or what it keeps, or says it will "see what we can do" |
New York and California have written rules on pay disclosure; how insurance brokers get paid covers them.
Which answers should make you pause?
Pause on answers that are vague, shifting or unwritten: a broker that will not say how it is paid, cannot give a license number, says yes to every question about binding coverage, or names no dates for its deliverables. One weak answer can have an innocent reason, so ask one follow-up in writing and note whether the answer is specific and on time. Each warning sign, with a fair test and a possible innocent reason, is laid out in red flags in an insurance broker.
Where does Morrow fit?
Morrow is the brand of Afthonea Inc., an insurance agency in Boston that focuses on business insurance. It can review inherited policies, flag gaps and request quotes, and you are welcome to ask it every question above. 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.
Look elsewhere if your business is in another state, or if you need life, disability or health benefits advice or a very large complex program. Whoever you choose, check the license on your state insurance department lookup.
Keep reading
- How Insurance Brokers Get Paid: Commissions, Fees and Disclosure
- Red Flags in an Insurance Broker After You Buy a Business
- What Broker Onboarding Should Look Like After an Acquisition
- How to Run an Insurance Broker Selection Process After an Acquisition
- The Seller's Broker vs Your Own Broker
- All guides for new business owners
Frequently asked questions
What is the first question to ask a new insurance broker?
Ask whom the broker represents in this sale and how it is paid. The answer shows whether the broker acts for you or for an insurer, and whether pay varies by insurer or volume. Ask for it in writing so you can compare firms.
How many insurance brokers should I interview after buying a business?
Two or three is enough for many buyers: the seller's broker if you are considering keeping it, plus one or two others. Use the same questions and the same documents with each. More than that adds work for many buyers without much more information.
Can I ask a broker for references?
Yes. Ask for owners in a similar industry or deal type, such as a recent acquisition with a lender. Brokers generally need a client's permission to share its details, so they may offer to connect you or describe a past example without names.
Is it fine to ask the seller's broker the same questions?
Yes, and it is fair to the broker. The seller's broker may have done a good job for the seller. You are checking fit with the business you now run, your lender and your investors, not grading past work.
What should I ask about claims before I hire a broker?
Ask who reports claims, who follows up with the insurer, and what the broker does if a claim is disputed or denied. Ask for the answer in specific steps. Remember that the policy wording controls the outcome, not the broker.
What should I ask a broker about my lender and my investors?
Ask who sends evidence of coverage to the lender, with the right clauses, at closing and at each renewal. Ask what the broker can report to your board or investors, such as policies, open items and spend, and how often.
References
- SBA: Get business insurance
- IRMI: Broker
- IRMI: Agent
- IRMI: Wholesale broker
- NAIC: Insurance producer licensing
- NAIC: Surplus lines
- New York DFS: 11 NYCRR 30.3, Compensation disclosure (Cornell LII)
- California Insurance Code section 1623 (broker presumption and disclosures)
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.
Morrow · 25 New Chardon Street, 4th Floor, Boston, MA 02114
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.