Aon Physician Alliance-Why Use a Broker?One of the principal reasons for using an intermediary for the purchase of insurance is to obtain the benefit of that broker's professional advice and market knowledge. The broker's function is to:
- fully understand the physician and their practice and business needs,
- advise on those areas where insurance is required,
- negotiate insurance coverage within the chosen range of insurers,
- handle the servicing and administration of the insurance contracts,
- advise on changes in coverage and improvements in wording as the physician's exposure develops or the insurance market changes, and
- advise and guide the physician on how best to manage its risk and prevent, to the greatest extent possible, future losses.
Additionally, the broker can act as an advocate on behalf of the physician with respect to issues surrounding the reporting of potential claims to the insurers, and in some instances the settlement of claims under the insurance coverage.
Understanding the Physician and their Business
Ideally, the broker should have internal resources with direct experience in the physician's business. In the case of the physician and/or physician group practices, the broker should have internal resources that have worked with healthcare providers and understand the healthcare delivery system.
Advising on the Insurance Required
In-depth knowledge of the physician's business naturally leads to a more thoughtful assessment of the physician's insurance needs. The broker should be able to provide useful advice with respect to appropriate levels of coverage, and should identify any particular issues for the practice that may require specific insurance solutions.
Negotiating Terms and Conditions
The largest portion of the overall service factor in any twelve-month period tends to be the negotiation of terms and conditions with the insurance market. This process includes, among other things, the following:
- development of underwriting submissions
- negotiations with insurance markets
- analysis of alternatives obtained to include:
- wording comparisons, financial comparisons and discussions with the physician or practice manager as to the subjective and objective advantages and disadvantages of each option.
In certain circumstances, the broker may assist the physician or practice manager in drafting or customizing policy language for specific insurance requirements.
Servicing and Administration of the Insurance Contracts
This function entails streamlining, to the greatest extent possible, the application process and assisting the physician or office manager through it, helping them gather documentation for the underwriters and, ultimately, packaging materials for appropriate presentation to the underwriters. In addition, the broker assists in the final execution of the transaction and maintains copies of the relevant documentation. Further, where required, the broker will facilitate the financing for the insurance transaction.
Monitoring Changes in the Marketplace
An experienced broker follows changes in the marketplace and keeps the physician and/or practice manager informed about changes in insurance availability and trends, new coverage issues or claim developments that may affect the practice, developments in policy language, and the activities of comparable practices with respect to insurance issues. The broker will provide periodic market updates, carrier and product updates and risk management updates to communicate this information to the physician and/or practice manager.
Advice in the area of risk management is provided on both a formal and informal basis. The broker should take a proactive approach in offering services to the practice, but should leave the utilization of such services to the discretion of each physician or office manager.
Selecting a Broker
Upon selecting a broker, you may be asked to submit a Broker of Record letter (BOR). This letter, usually prepared on your letterhead, is simply a statement that the designated broker has been selected by you to investigate and explore insurance options on your behalf. The BOR allows both your broker and the carrier(s) to begin working diligently in good faith on your behalf without the concern of duplicative requests being submitted by another broker.
Brokers receive their compensation from the carrier. In complying with Aon's Transparency and Disclosure procedure, we provide to you a complete accounting and disclosure of our compensation arrangement with the carrier(s).
At Affinity Insurance Services, we create personalized client teams that deliver prompt, accurate and astute insurance and risk management services, solutions and tools. Your client service team is your insurance and risk management consultant, serving as your unbiased representative in the insurance marketplace, and collaborating with you to evaluate your risk profile and develop an insurance program tailored to your business. Our teams work together seamlessly to provide the value, confidence and expertise that you expect. To review your client service plan in more detail, please contact a member of your client team.