You’re building a business from the ground up. You’re savvy enough to know that you’ll likely need insurance, but there’s just one wrinkle: this is the first time you’ve done this, and you aren’t sure what kind of policy you need or who to talk to about it.

An insurance agent can help you navigate the uncharted waters of the insurance world by allowing you to leverage their knowledge and make the right choices for your burgeoning venture.

Read on to find out what an insurance agent’s role is in the process of acquiring a policy and how an agent may be able to make that process easier for you.

What is an insurance agent?

An insurance agent is someone employed by an insurance company to sell the company’s products. Agents are the face of the company for you, the customer. It’s important to recognize that, though an agent’s job is to help you purchase an insurance policy, they represent the company’s interests, not yours.

Agents generally fall into one of two categories: captive and independent. A captive agent is usually employed directly by a single company and will only offer that company’s products.

As the name suggests, an independent agent operates independently and can sell products from a range of different insurers. Having a wider array of products in their toolkit can often mean it’s easier for them to find the right match for a client. This isn’t to say that an independent agent is necessarily “better” than a captive one, though they generally offer a wider variety of choices. Ultimately, whether an agent is captive or independent only affects which products they can offer you.

What does an insurance agent do?

The biggest part of an agent’s job is, of course, to sell insurance policies. Your agent will be your point of contact throughout the process of choosing a policy that is right for you. An agent may reach out to a client directly as part of a sales campaign, or the insurer may refer you to one so that they can start the process of finding the right coverage for you.

When you’re considering a policy to cover your business’s potential liabilities, it’s an agent’s responsibility to make sure you understand the ins and outs of the policy you’re looking at: what it covers, what it doesn’t, how much it costs, and any other pertinent information you need in order to make an informed decision. They’ll also walk you through any necessary paperwork and additional documentation needed, if applicable.

An agent’s job doesn’t end once a policy is in force, either. If you have questions about your policy later on or decide to change it or cancel it, your agent will be able to help. For instance, if you wanted to know if your general liability insurance covers the medical expenses associated with a customer’s injury caused by one of your employees, a call to your agent could answer that question quickly and easily.

How do insurance agents get paid?

Like many other sales-based professions, insurance agents work primarily on commission. Independent agents are typically 100% commission-based, whereas captive agents often have a base salary and earn commissions on top of it. However, the commission level may be lower than their independent counterparts because they also earn a base salary.

The amount insurance agents earn is based on the policy issued. In most cases, agents calculate their commission as a percentage of the insurance premium, although there is some variation depending on the policy. In most cases, an agent will receive a monthly or annual commission as long as the policy is active, but, again, this may vary depending on the type of insurance sold.

Agents may also earn what’s known as contingent compensation, which functions much like a performance bonus and isn’t tied to a particular policy. For instance, they may receive a contingent commission if they hit a target number of policies sold in a given period. Contingent commissions function much like bonuses for hitting specific sales goals.

How much do insurance agents make?

Since agents are paid on commission, there is no hard-and-fast rule for how much they earn. An agent’s salary depends on how many policies they sell and the cost of those policies. Some agents sell insurance full-time, whereas others may consider it a “side job” and only sell a handful of policies per year.

So there is a pretty wide range in salary levels for insurance agents. That said, the average annual salary for insurance agents is approximately $52,000 per year.1

How does one become an insurance agent?

Selling insurance requires getting a license from the state, which in turn requires passing an exam to ensure the agent understands what they’re selling. To do business in multiple states, an agent will need to be licensed in all applicable states.

Once the agent gets their license, an insurer hires an agent as they would with any other job, with a couple of extra steps. This often includes a background check for any criminal record or other factors that might disqualify someone, such as a felony.

If everything checks out, the insurance company will then authorize the agent to represent them. Typically, the new agent will receive some education about the types of policies the insurer offers, at which point they are then free to sell those policies to new clients.

How can an insurance agent help you?

An agent is there to guide you through the process of obtaining insurance, from picking a policy to filling out forms to fielding any questions you may have once your policy is active. If your needs are not overly complex, you may not always need to speak to an agent. With Thimble, getting the right policy can be as straightforward as checking your email.

Thimble can tailor general liability insurance and professional liability insurance to your needs, whether it’s by month, year, or an individual job. It’s as simple as clicking “get a quote.” You can also heat up a pizza, download the mobile app, answer a few quick questions, receive a quote, and get your policy before your pizza’s done. That leaves you with more time to do what you do best — run your business with confidence that your needs are covered.


  1. US Bureau of Labor Statistics. Occupational Outlook Handbook.