How to Change Insurance Brokers: What is a BOR?
BOR stands for "Broker of Record" or equivalently, an AOR is an Agent of Record.
This is a one page document written in the form of a letter. The letter indicates a business's appointment of a new insurance broker/agent. It notifies the insurance carriers who write the insurance policies and the incumbent or "old" broker" that the policies will be transferred to the newly appointed broker.
Why would you do this?
Changing insurance brokers is common practice among businesses. It is done for many reasons.
They outgrow their current provider's capabilities
The new broker is closer in geography
Their old agent retires
Services are better with the new broker
Or on the contrary, the business is experiencing a lack of service from the old broker.
Some businesses also have internal policies where they put their insurance policies "out to bid" on a periodic basis in hopes of saving on business insurance costs (which usually doesn't work)
A new CFO or business insurance buyer is hired and would like to insert a specific insurance broker relationship
The list goes on
How does it work?
The letter is drafted by the newly appointed broker.
An officer or director of the business/insured simply signs and dates the letter authorizing the transfer.
The letter is submitted to the carrier and the carrier notifies the old broker.
A waiting period of 5 - 10 business days goes by, where the old broker can waive the waiting period or just do nothing.
Note different carriers may have different "BOR" criteria and/or different waiting periods.
It is often best practice for the new broker to coach the business/insured on how this process works and perhaps facilitate the "breakup". To make the change smoother, it would be best to take an upfront approach, have the business/insured warn or politely communicate to the old broker that they've essentially been replaced.
Do I have to change my insurance policies or insurance carrier to change brokers?
No. The broker of record letter process does exactly this: Changes your broker/agent, not your policies, coverage, or insurance carrier.
What does it look like?
Here is a "draft" letter:
(Input on Business/Insured Letterhead)
RE: Policy Numbers
To Whom It May Concern:
Please be advised that I have appointed New Broker Agency Name , New Broker Agency Address as my exclusive representative for the above-referenced policy. Effective immediately, you are authorized to provide New Broker Agency Name with any information they request regarding our insurance coverages, loss information, rating information and other items requested.
New Broker Agency Name is not responsible for any errors or omissions that may have occurred in insuring my account until they have had reasonable opportunity to review my insurance program and make any necessary changes or recommendations.
This change is effective (Today's Date) and supersedes any authorization previously issued. Please waive any waiting period required, as there will be no rescinding letter issued.
Business/Insured Director or Executive Name & Signature