Also known as: Insurance Broker · Insurance Agent
A broker represents you; an agent represents the insurance company.
An insurance broker works on your behalf to find coverage across multiple carriers. An agent represents one or more specific insurance companies. In most states, brokers owe you a duty of reasonable care in procuring coverage; agents' primary obligation is to their appointed carriers. The specific duties vary by state law.
A broker is almost always better for startups. Brokers represent you (not the carrier), can shop multiple carriers for the best terms, and owe you a duty of reasonable care in procuring coverage. Agents represent specific carriers and may only offer limited options. For specialized startup coverage, an independent broker with tech expertise is ideal.
An insurance broker works on your behalf to assess your risks, shop the market across multiple carriers, compare quotes and coverage terms, and place the policy that best fits your needs. They also handle ongoing servicing—issuing COIs, adding endorsements, and advocating for you at renewal and during claims. Unlike an agent tied to one carrier, a broker's duty runs to you, the client.
Usually not directly—brokers are typically compensated through a commission built into your insurance premium, paid by the carrier, so you don't receive a separate bill in most cases. Some brokers charge a separate fee for specialized work, which must be disclosed. Because commission is already priced into premiums, using a broker generally doesn't cost more than going direct—and often saves money by comparing carriers.
Definitions are educational and may be modified by your specific policy language, endorsements, and state rules. For regulatory guidance, refer to the California Department of Insurance or the NAIC.
Last updated: July 2026.