What distinguishes an insurance agent from a broker?

The distinction between an insurance agent and a broker primarily lies in whom they represent in the insurance transaction. An insurance agent represents an insurer, meaning their primary responsibility is to sell the insurance products of the company they are affiliated with. They have a contractual agreement with the insurer and act on behalf of that company, assisting clients in selecting appropriate coverage from the insurer's offerings.

Brokers, on the other hand, typically act on behalf of the insured. They work independently and are not tied to any single insurance company, which allows them to shop around and find the best coverage options from multiple insurers based on the client's needs.

Understanding this distinction is crucial for anyone involved in the insurance industry, as it affects the agent's obligations, the services provided to clients, and the manner in which policies and claims are handled.