In an age where Internet-based technology increasingly lets consumers cut costs by cutting out the middleman and dealing directly with providers like GEICO, it’s tempting to consider insurance brokers and agencies as anachronisms. Don’t tell them that.

“The Internet really hasn’t taken any business away from us,” says Michael Andersen, a principal in the Princeton office of William Gallagher Associates, an independent retail insurance broker. “People may use the Internet to buy something simple, like auto insurance, but the lines that we deal in are more complicated.” His firm handles property and casualty coverage, professional liability and employee benefits.

Andersen says independent retail brokerages like his work on behalf of clients, finding an insurance company that best meets their needs at a competitive price.

In contrast, wholesale brokers work with agencies to find hard-to-place coverage—a liability policy for a dynamite company, for example.

“Each company has different needs,” he says. “For example, a startup usually doesn’t have enough cash on hand to absorb the same kind of unexpected risk that a mature company might, so we’ll recommend an appropriate level of coverage. It’s a matter of balancing risks and rewards.”

The process usually involves sitting with a business owner and go through his or her operations in detail, says Jeanne Heisler, president of The Ronan Agency Inc. in Brick.

“For large and small businesses, we gain an understanding of what they do, of their assets and their risks,” she says. “It can be an eye-opener for an owner who didn’t think he had exposure because, of say, his Web site or other activities.”

Employment practices and technology are two growing areas that previously did not account for much activity, she adds.

“As more companies use technology or provide related services, they have to be aware of their insurance needs,” says Heisler. “Also, in the past few years we’ve seen more exposure regarding hiring, firing and other employment-related practices. These are areas that a business owner may not always associate with insurance issues.”

Andersen says that New Jersey’s high concentration of companies in the biotechnology, life science and financial services segments means that successful brokers and agencies have developed an expertise in these specialties.

“We’re called upon to find insurance companies that can accommodate our clients’ profile,” he says. “But there’s more to it than price. We’re also keenly aware of the financial strength of the insurer itself. We want to be sure they’ll be around in case a claim needs to be paid.”

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By Martin C. Daks