Although the terms “insurance agent” and “insurance broker” are sometimes used interchangeably, there is an important distinction between them. Persons with these job titles both work to facilitate the purchase of insurance policies by coordinating between (1) persons and entities who are interested in purchasing insurance policies and (2) insurance companies who are interested in selling insurance policies.

The primary difference between an insurance agent and an insurance broker is who they represent in a transaction—and thus where their loyalties lie. An agent represents one or more insurance companies and a broker represents the insurance buyer—whether an individual or a business.

An agent—sometimes referred to as a captive agent—generally provides information about insurance policies (sometimes called “product”) available from the insurance company or companies the agent represents. In contrast, an insurance broker “goes out into the market” and helps the consumer or business owner find, compare, and acquire the appropriate insurance coverage through one or more insurance policies.

An insurance broker’s compensation for helping a client find, compare, and acquire the appropriate insurance coverage is included in the premium payments made by the client (insured) who purchased the policy or policies. A broker should provide a client with a statement detailing the amount of the premium that will be paid to the broker in commission before the client completes the purchase.

In Florida, insurance agents and brokers are both involved in the sale of insurance policies, but they have distinct roles and responsibilities. An insurance agent is a representative of one or more insurance companies and sells insurance products on their behalf. These agents are often referred to as captive agents if they represent a single insurer or independent agents if they represent multiple insurers. On the other hand, an insurance broker acts on behalf of the insurance buyer, assisting individuals or businesses in finding, comparing, and acquiring suitable insurance coverage from the available options in the market. Brokers are compensated through commissions included in the premium payments made by the client, and Florida law requires brokers to disclose the amount of commission they will receive from the insurance transaction before the client finalizes the purchase. Both agents and brokers in Florida must be licensed by the Florida Department of Financial Services, and they are regulated under Florida statutes, which set forth the standards for their conduct, duties, and obligations to the parties they represent.