n the realm of commercial insurance, brokers render invaluable support for their clients by ensuring proper coverage and protection for their employees and physical assets. Brokers are the conduit between the insurance carrier and the client, says Todd Wheeler, a principal and vice president at Parker, Smith & Feek. “We’re viewed as trusted advisors by our clients and in the same light as they view their CPA, banker, or counsel,” he says. “The premiums that we are able to save them are real dollars that are injected back into the Alaskan economy.”

In essence, insurance is a mechanism that helps companies manage risk, which is a critical function of their success and survival, says Chris Pobieglo, president of Business Insurance Associates. Insurance allows a company to take an unknown risk and transfer it into a known cost such as an insurance policy. Pobieglo explains: “Insurance takes an unknown and puts a known value on it. This helps companies with preparing budgets and not being caught by surprise by a catastrophic event that can put them out of business.”

In terms of economic impact, insurance contributes significantly to the state of Alaska, according to Pobieglo. “Taxes on insurance policies were the second-biggest revenue generator for Alaska,” he says.

However, the relevance of insurance is sometimes more subtle and latent, according to Pamela Whitfield, founding partner of Elite-VB. Whitfield, who sells voluntary or supplemental insurance from multiple carriers, emphasizes the potential effect of COVID-19 in the workplace and how employee-funded voluntary insurance may be applicable. She says, “As financial times get tougher and tougher on businesses, employers may drop their employer-paid programs and find that adjusting those benefits to be employee-paid can work to retain valuable benefits without having a strain on the company’s bottom line.”

Business Insurance Associates is among the contingent of local independent brokerages that assist Alaska’s employers. In this role, the small Anchorage-based firm represents its clients, not insurance carriers, stresses Pobieglo, who holds twenty-plus years in the insurance industry. “The local broker has the ability to provide a level of personal service, and that’s the cornerstone of what they offer,” Pobieglo says. “It allows a broker to have a vested interest in your success.”

In addition, Pobieglo says local insurance brokers are plugged into the community and may be able to offer ground-level business advice, business referrals, and other resources. “Some of the larger brokers retain a service center outside Alaska, and you call a 1-800 number,” he says. “At that point, you’re just a number. They don’t know your goals, your dreams, or your kids.”

At Parker, Smith & Feek, this process typically begins with engaging clients in an in-depth discussion about their exposures, what keeps them up at night, and anything else that concerns them. This involves asking a plethora of questions to get to know clients on a business and personal level. “We can’t know everything they need unless we understand their business and concerns, so you have to help them identify the risks, evaluate them, and decide how to effectively finance them,” Wheeler says.

Business Insurance Associates also takes an exploratory approach to helping businesses identify their specific insurance needs. Pobieglo gathers information about their business, their objectives, and their appetite for risk. He also often reviews leases and contracts and discusses compliance-related issues. “We make recommendations to them in the form of a proposal, which may have different options,” he says. “And a lot of the time, we’ll put a number [cost] to the options.”

During the year, Business Insurance Associates advises clients of changes that could affect their coverage. The company also completes an annual review and contacts clients ninety days before their renewal to ensure they have adequate protection.

Whitfield, who works with employers as well as individuals, says it’s common for people to be confused about voluntary benefits. These non-traditional benefits—which are normally employee-paid through payroll deduction by the employer—often include disability and life insurance as well as popular plans like accident, hospital, and critical illness. Whitfield concentrates on educating and preparing clients to take advantage of the most current benefits that are available. “There is a need to upgrade a ton of older voluntary benefit programs in place in Alaska that just aren’t keeping up with the exciting features available from carriers in the market today. Also, who knows if a COVID diagnosis in 2020 will lead to a ‘pre-existing condition’ in 2021, so now is the time to spruce up voluntary programs in place to ensure they rise to the risks that are real.”

Alaska’s insurance brokers are intentional about certifying that they are equipped to serve clients in a variety of industries. Business Insurance Associates, for instance, caters to clients in the construction, healthcare, and transportation fields. Representing niche industries lets the company’s staff focus their training and education, so they can hone their knowledge of the industry they’re involved in, Pobieglo says. Three of his employees, for example, have CRIS (Construction Risk and Insurance Specialist) certifications through the International Risk Management Institute. “The more you know about the industry, the more you can be in a position to help your client,” he says.

At Parker, Smith & Feek, clients can benefit from its industry-specific “practice groups,” which have been invaluable to the firm’s organic growth and success. Along with being salaried employees, and having owners that all work in the day-to-day operations of the business, the practice groups have been a real differentiator because they allow everyone to sit down once a month (at minimum) to group-share and learn, Wheeler says. “We don’t have silos at PS&F,” he says. “We work as a team, not lone rangers, and the groups only enhance that collaboration and allow us to tap into a tremendous amount of intellectual capital within our company.”

Maintaining ongoing client relationships is also essential to the success of Parker, Smith & Feek and other insurance brokerages. Wheeler’s approach of maintaining a positive, ongoing relationship with clients is meticulous and deliberate: be available, respond quickly, and let them know that he’s always in their corner and will negotiate and advocate on their behalf. Because insurance is a relationship-based rather than a transactional industry, Wheeler has become friends with most of his clients. “We talk regularly and eventually got to the point where, in an hour-long lunch, we talk about insurance for less than five minutes—if we even talk about it at all,” he says. “My clients know that I have their back and I won’t back down until we get a result that works for them.”

Many insurance policies will be similar for businesses across industries, such as workers’ compensation, commercial property, commercial auto, and commercial general liability. But there will be coverages one company will purchase that others choose to forgo. That’s because there are so many policies that are applicable to one type of business but not to another. Take business interruption (BI), for example. “A restaurant will purchase business interruption coverage because, if they have a fire on a Friday, they can’t just go across the street and open for business Monday morning,” Wheeler explains. “They’re going to be shut down until they can remodel or rebuild, which could take six months or longer, and they’ll take a big financial hit that the BI policy can address. On the other hand, if a contractor’s primary office has a fire, their business may not be substantially impacted because their primary work is usually offsite, and they potentially can rent a separate space quickly and resume operations. So, they may decline a business interruption policy.”

Ultimately, Wheeler says, it’s incumbent upon brokers to work closely with clients to identify and assess their risk and then secure cost-effective policies when their clients transfer the risk to an insurance carrier.

Employers should also be aware of benefits or situations that may be particularly pertinent for residents of Alaska. Earthquake insurance, for instance, would not be purchased in states like Florida or Rhode Island, but it could prove critical in Alaska. In addition, Alaska has a lot of higher-risk industries, such as commercial fishing, mining, aviation, and trucking, which can impact insurance coverage. The insurance needs of riskier industries are not necessarily different in Alaska than elsewhere, but employers’ medical costs in Alaska tend to be much higher for workers’ comp claims.

He adds: “With workers’ comp claims, those are a little more straightforward. But with a liability claim, it can take years to unfold in the court of law and can be more complex.”

Insurance brokers don’t pay claims directly to the client, instead acting as the middleman between the two parties. The broker is essentially an “employee” or extension of the client just as bankers, accountants, and attorney are, Wheeler says. “We work diligently on behalf of our clients to ensure that carriers honor the terms of the contract, which includes paying claims and making clients whole again,” he says.

The process for claiming and receiving benefits plays out differently with voluntary insurance. Cash benefits are paid to the employee to cover out-of-pocket costs such as hospitalization, urgent care, rehab, or outpatient surgery. And some voluntary insurance options offer broader coverage. “New plans now include pet boarding, coverage for mental illness, coverage for a COVID diagnosis and more—all paid to the employee to lessen their financial risk for pennies a day,” Whitfield says.