You should merge carriers when you have two profiles of the same carrier. The two profiles could be spelled slightly differently (e.g. "Travelers Casualty Company" vs. "Travelers Casualty Co."). You may have used both, but they are the same entity as defined by their same/unique NAIC number. So, you should definitely merge these.
Child/parent is reserved for case when Progressive has 10 sub-underwriters: Progressive Ohio, Progressive Hawaii, Jersey Auto, etc. These are different entities with unique NAIC numbers, but they are all related to Progressive. You would make them "children" to Progressive (not an actual entity). This way, when you run reports, you can just specify "Progressive" and the report will include all of the "children" policies as well.
To merge Carriers, follow these steps:
1. From your main navigation menu, click on "Contacts" and then click on "Carriers"
2. Locate your Carrier under the "List of Carriers" and click on the gray "Details" button next to their name
3. Under the "General" tab, click on "Merge Carriers"
4. Under the "Merge Carriers" field, select the duplicate Carrier profile in the drop-down menu (next to "Carriers") and then click on the blue "Merge" button