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 Connecticut, the distinction between an insurance agent and an insurance broker is legally significant. An insurance agent represents one or more insurance companies and is responsible for selling the insurance products of those companies to consumers. They 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 represents the insurance buyer and is tasked with finding, comparing, and acquiring suitable insurance coverage for their client from the available options in the market. Brokers are required to act in the best interests of their clients and must provide a statement detailing the commission they will earn from the insurance premium before the client finalizes the purchase. Both agents and brokers must be licensed by the Connecticut Insurance Department to operate within the state, and they are regulated under state statutes and federal law to ensure they adhere to ethical and professional standards.