Handing the same risk to three brokerages feels like creating competition. In commercial property and casualty it does the opposite, for a reason most business owners have never been told.
What happens when brokers collide.
The instinct is sound. You want more than one number, and you do not want to take the first one on faith. But the way commercial insurance is distributed in Canada means the lever you are pulling is not the one you think it is. Handing the same risk to several brokerages at once does not multiply the market you reach. It divides one market between people who are about to block each other out of it.
An insurer quotes a risk once, to one broker
This is the piece of plumbing the whole subject turns on. In commercial property and casualty, an insurer will generally accept a submission on a given risk from one brokerage and quote it to that brokerage only. The first submission in registers the account to whoever sent it. When a second broker sends the same risk, the answer that comes back is not a competing price, it is blocked from other brokers: the risk is already with someone else.
Brokers call it blocking, or a blocked market. It exists so an insurer is not made to bid against itself, and so an underwriter is not doing the same work three times for one premium.
It also does not clear quickly. Once an insurer has registered or declined a risk, that position often stands for the rest of the policy year, and releasing it to a different brokerage generally takes a signed instruction from you. So, the practical effect of sending your risk to three brokers is that each insurer is claimed by whichever one got there first, and the other two are locked out of it.
The first submission is the one that counts, even when it is the worst one
This is the part that costs real money. The submission an underwriter sees first is the submission your business gets judged on, and you have no control over which broker got there first or what they put in it.
A rushed one-page email with no loss runs, stale values and no explanation of how you operate will be priced conservatively, or declined outright, because an underwriter with nothing to go on assumes the worst. That number then belongs to your account at that insurer. A better broker arriving the next day with a properly built submission cannot undo it.
The uncomfortable version: some of that first-in behaviour is deliberate. A broker who submits a thin file quickly has reserved the market whether they were ready to present you well.
There are fewer markets than you think, and they overlap heavily
Shopping brokers made more sense forty years ago, when a brokerage might represent a handful of insurers and the one down the street represented a different handful. Consolidation changed that. The number of insurers writing Canadian commercial business shrank, and most established commercial brokerages now reach broadly the same ones.
The specialty end works through managing general agents. An MGA is a firm that holds underwriting authority delegated by an insurer for a particular class, and for harder or more specialized risks the MGA is the practical route in rather than the insurer directly. Those MGAs are not exclusive either. Most brokerages deal with most of them.
Put those together and three brokerages is rarely three sets of markets. It is one set of markets approached three times, with the first arrival winning each one and the other two collecting declines. You have not widened your search. You have run a race to see who can burn your options fastest.
What the underwriter on the other end sees
Underwriters work through far more submissions than they can quote, so they sort them, and put their effort into the ones they believe they have a real chance of writing. That is the lens your account is being read through.
When the same risk arrives from three brokerages, it tells them a broad marketing effort is under way and that their odds of winning it are low. The sensible response is to push it down the pile, and sometimes to decline it without pricing it at all. An insurer that would have been competitive can pass simply because the account looked shopped.
Worse, the three submissions rarely agree. Different revenue figures, different values, a different description of what you do. An underwriter looking at conflicting accounts of the same business does not conclude that one broker is sloppy, they start asking questions about the business.
What it costs you, beyond the price
The pricing damage is the least of it. The rest lands on you directly.
- You answer the same questions three or four times, from three or four people, and none of them is assembling a complete picture.
- Nobody owns the file. There is no one coordinating a risk-control visit or an underwriter question, because each broker is working their own version of the account.
- You lose the one thing a broker is for. Every quote you receive is being presented by the person who wants you to take it, so nobody is giving you an independent read on the wording, the exclusions or the insurer behind it.
- Broker of record letters get introduced to unpick the blocks, relationships get tested, and the exercise loses momentum right when your renewal date is approaching.
Marketing an account and shopping brokers are two different things
This is the distinction that matters, and it gets lost because both get called "shopping around". Testing the market is a good idea and this page is not an argument against it. Testing the market means one broker taking a properly built submission to many insurers on your behalf. Shopping brokers means many brokers taking a partial submission to the same insurers.
The first widens the number of markets that see you properly. The second narrows it, because of everything above. They feel like the same instinct and they produce opposite outcomes.
If your account has not been marketed in several years, market it. Give one broker the mandate, the documents and the time, and hold them to what they come back with.
Choose the representative, not the price
If most brokerages reach a similar set of markets, then the market is not the differentiator. The person is. What separates two brokers is how well they present your business, what they know about the risks in your industry, whether they read your contracts, and who picks up the phone when a job site wants a certificate at four on a Friday or when you have a claim.
When more than one broker does make sense
Splitting by line, rather than splitting one risk, is legitimate and common. If a brokerage does not write group benefits, or surety, or a specialty line your operation needs, putting that line elsewhere costs you nothing, because it is a different market and a different submission.
Splitting one risk between two brokers can be made to work, but only if the markets are divided explicitly. Each broker gets a named list of insurers, in writing, with no overlap, and knows the other exists. That takes managing and it is rarely worth the effort on a mid-sized account, but it is the only version that does not end in mutual blocking.
And if you already have three brokers working on the same renewal: stop, and choose one now. Every day it runs, more of your markets get claimed and more of them get claimed by a submission you never saw.
Price is one variable in the answer
Two policies at the same premium can be completely different promises, because the differences live in the deductibles, in whether the policy pays replacement cost or knocks off for age and wear, in the sublimits and in the exclusions, rather than on the front page.
And the cheapest quote is not the cheapest outcome if it comes from someone who will not read your contract before you sign it, cannot turn a certificate around the day a general contractor asks, and is hard to reach the week you have a fire. That is not a soft consideration. It is the part of the service you will use most.
Want one broker to run it properly?
Send us the current policy and we will tell you which markets are worth approaching, what the submission needs, and what we find when we get there, declines included. If your existing program turns out to be the right one, that is the answer you will get.