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Insurance broker vs agent (5 differences & 2 Similarities)

This post covers everything you need to know about Insurance broker vs agent

All Insurance broker vs agent have licensed professionals who help businesses and individuals get insured.

There are 415,446 Insurance Brokers & Agencies businesses in the US as of 2022, an increase of 0.3% from 2021.(source)

Understanding the difference between the two can help you hire the right expert.

To help you with that, here I will guide you through

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  • Who is an insurance agent and his role
  • who is an insurance broker and his role
  • different between Insurance broker vs agent
  • the similarities between an Insurance broker and an agent

Let’s get started

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Insurance Agent

An Insurance Agent is a state-licensed professional who represents an insurance company in selling and servicing policies or he is a local representative of any number of insurance companies.

In simple terms, an insurance agent is a person who acts on behalf of insurers. He is responsible for distributing the insurer’s products; their insurance policies. He can represent one or several different insurance companies.

Agents serve as middlemen, supplying information from the insurance business or companies they represent to prospective customers.

They have agreements with insurers that outline the types of policies they are permitted to offer and the expected revenue from doing so.

They can also bind the insurers to the policy contracts, which is typically done directly inside the underwriting processes of the insurer.

One of the most important characteristics that characterize an agent as an agent is the ability they have to bind the insurer because they represent the business.

In most states, insurance agents are required to undergo approximately 40 hours of passing classroom education for the type of insurance they are qualifying for to be approved to take the state insurance exam.

After successfully completing the state exam an insurance agent will need to take continuing education classes to keep her/his insurance license current.

Only insurance agents are allowed to sell and service insurance policies and only in the states, they are licensed.

Insurance Broker

An insurance broker refers to a person or organization, that acts with complete freedom as to his choice of the undertaking and for a commission or other compensation and not being an agent of the insurer, bring together, with a view to the insurance of reinsurance of risk, the person seeking insurance or reinsurance undertaking, carry out work preparatory to the conclusion of contracts of insurance or reinsurance, and where appropriate, assist in the administration and performance of the contract in the event of a claim


The definition above sounds so technical

Let’s try this one

Keeton Keeton E.R (1988) Insurance Law, A Guide to Fundamental Principles, Legal Doctrine, and Commercial Practise. Pg. 80 defines an insurance broker as an independent agent who represents the buyer, rather than the insurance company, and tries to find the buyer the best policy by comparison shopping.

Generally, A broker is a qualified insurance professional who offers legal assistance to individuals or organizations wishing to purchase insurance.

Insurance brokers are obligated by law to operate solely in the interests of their clients, which is known as a fiduciary obligation.

A broker will collaborate with clients to determine and put together the appropriate insurance plan for each client’s unique coverage requirements. They can shop around to obtain the best plans at the greatest costs based on the needs of their clients.

Insurance broker vs agent

The legal differences between an Insurance broker vs agent hinge on their duties, and the nature of their liability;


Agents represent insurance companies. Brokers represent their clients.

The Insurance agents serve as an intermediary between the insurance company and the insured.

They are imposed with administrative duties.

The insurance agent has no duty to conduct a thorough examination of a business or to make appropriate coverage while Insurance brokers have a higher duty towards their clients i.e. duty to analyze a business, interpret the data from various databases, and secure correct and adequate coverage for the insurance business.

Insurance brokers typically charge an administrative fee or premium payments which are higher than that charged by an Insurance Agent.

Insurance brokers can be best described as a kind of super-independent agent. Brokers can offer a whole host of insurance products and services for an individual or a prospective policyholder to consider.


The liability of the insurance agent is to their customers and it is purely administrative in nature i.e. agents are only responsible for the timely and accurate processing of forms, premiums, and paperwork while the liability of an insurance broker is on the acts of their agents.

Agents have no duty to conduct a thorough examination of an individual’s business or to make sure that appropriate health insurance coverage has been provided to the concerned individual.

Rather, it is the customer’s obligation to make sure that he/she has purchased the required/desired insurance coverage.

An insurance broker will only be liable for the acts of the insurance agents if such acts are within their agency agreement.

Similarities between an Insurance broker vs agent

Both insurance brokers and insurance agents must be registered/licensed.

No person shall act as an insurance broker, insurance agent, or agent for an insurance broker unless he is registered as such in accordance with the provisions of the law.

Both the Insurance Agent and Insurance Brokers are the intermediaries of the insurance business.

Isack Kimaro
Isack Kimaro

Isack Kimaro, a lawyer, Creative Writer and self-taught SEO expert has been a prominent author of law-related topics since 2017. Through hard work, dedication, and a relentless pursuit of knowledge, Isack has successfully navigated the legal industry by providing valuable and easy-to-understand legal information to 500,000+ individuals of all levels of understanding.