Hall of Shame – Bigger is Better…Right? Large Insurance Brokers May Not Be The Best Fit

This case study represents an actual coverage flaw in an insurance program of a well run, profitable business.

An established multi-national Pharmaceutical company sought the financial support of a large investment firm. As part of the deal, the firm forced the company to abandon our services for the services of a large multi-national broker, because “they are more experienced in the support of large business”. We were notified of the change 60 days before the program renewal date and planned accordingly.

The Problem

As the late March renewal date approached, we began to receive some disturbing phone calls and E-mails from the President of the North American operations. He could not get any assurance about the renewal of his program, despite repeated requests to his “big broker”. In late March the renewal date came (and went) with conflicting comments from two different “big broker” offices (New York and London) on whether coverage was in place for the US operations. Ultimately, after repeated phone calls over a month, the President’s worst fears were realized; there was no coverage in place. This multi-million dollar company with operations in 6 countries had no coverage, for over a month! When informed (by us) he was now subject to personal, civil and criminal penalties for not having Workers’ Compensation coverage in place, he issued an ultimatum to the “big broker” within hours to effect coverage. Despite two offices being involved, they failed to deliver.

The Solution

With our offer to help, the President was able to break the impasse with his financial team and have us help. Working with the incumbent carrier we put insurance coverage in place retroactively to the original March renewal date creating 100% certainty of coverage as though it never lapsed.

A common misconception is the bigger the broker, the better the broker. Overlooked is the focus on execution, responsiveness, commitment to put the customer’s interests first, and transparency of process.   The big broker in this case was incapable of supporting the client because their goals were more important than their client’s goals.

How KMRD Can Help:

KMRD delivers risk management and human capital solutions to over 600 clients nationwide. Our award-winning team, disciplined approach, proven processes, combined with our risk management portal make KMRD the leading choice to improve business protection and reduce the overall cost of risk.


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