You are running a business subject to market risks. You want to procure from an insurance company a comprehensive cover. You are informed that agents and brokers are insurance intermediaries who will help you to negotiat

Insurance intermediaries facilitate the placement and purchase of insurance, and provide services to insurance companies and consumers that complement the insurance placement process. The insurance market has different categories of intermediaries-agents, brokers etc. Even among the agents, we have a category of corporate agents. All these intermediaries as a professional job role and help in the growth of the insurance market. The types of intermediation that are requires depends wholly on the nature of cover required the risks inherent in the business carried on the protection that is offered by an insurer. The professional attachments of the intermediary and the reputation of the insurer among the various things. The insurance companies even in respect of fire loss of projects cover etc. have standard cover which lay down the applicable and these are available off the shelf as one can say. A commercial policy is normally to be obtained from a General Insurance Company; a product of this type is a short term cover subject to renewal periodically and also governed by commercial principles and practices. The type of intermediation assistance in such a case will primarily be governed by the risk factors of the business. An agent is normally an employer/representative of an insurance company and frequently market products that have been developed his principal. Though an agent has, as per IRDAI regulations to possess qualifications and be licensed, his jurisdiction is confirmed to the policies/products that have been developed by this principal unless the insurance company on being approached by a prospect for a special cover to meet its need shown as inclination, the prospect is not served to his full requirements. Hence in most cases business requiring special provisions or are faced with specific underlying risks will not be effectively serviced by an agent. One thing that has to be noticed in this case is that an agent is a paid his commission from this insurer. On the other hand, a broker is a free professional attached to any insurance company and is enabled to carry as his profession on the strength of a license granted by IRDAI. A broker has to satisfy financial obligations to set up a profession and has to be qualified. He will be subject to the discipline of the IRDAI. As part of his works as broker will study the risk perceptions of business various alternatives that are available to control risk and design a suitable policy for the business which he will then take to an insurer and obtain a cover. Normally a broker will also help a business to negotiate with the insurer the obtainment of a cover and in case of claim pursue the matter with the insurer and collect the claim. A broker gets paid by the inured for his efforts and the scale of remuneration is fixed by IRDAI. As in this situation for running the business the business person seeking a cover of market risk wants to procure a insurance comprehensive cover for that he should approach for discussion and guidance he should approach to a broker. As a technical matter, a broker's role may change during an insurance transaction and over the course of an on-going relationship with a client. Many brokers sometimes act as an "agent" of the insurer and other times as a "broker" of the client when assisting a client with insuring its risk exposures through an insurance contract with a traditional carrier. As a practical matter, regardless of the legal role in which a broker is acting, the manner in which the broker approaches all such placements for his clients is as an intermediary - working on behalf of his clients to facilitate the consummation of insurance contracts with carriers who have the ability and capacity to properly insure his risks. On a balance in case of business where a strait jacketed policy will not be useful, the engagement of a broker will be the most ideal.