Why Should I Use an Insurance Broker?
When insurance becomes more complicated, having someone to help you navigate it can make a difference.
Buying insurance directly from an insurance provider can be perfectly suitable for some straightforward requirements. But as your circumstances become more complicated, so can the decisions around insurance.
A growing business, multiple premises, specialist equipment, contractual requirements or increasing cyber risks can all create questions about whether your existing arrangements still reflect what you actually do.
That is where an insurance broker can add value.
Do I Need an Insurance Broker?
There is no single answer for every person or business. The right approach depends on the complexity of your risks, the type of insurance you need and how much support you want throughout the policy lifecycle.
For a small business with straightforward requirements, arranging insurance directly may be appropriate. For a business with several different exposures, specialist requirements or significant changes ahead, a broker can provide another route.
Similarly, for many individuals, home insurance could be arranged directly, but for those with non-standard construction, previous claims, high value homes and valuable contents, a broker can be useful to provide advice and look at alternative markets to help protect your property.
Rather than simply looking for a policy, a broker can work with you to understand your needs and circumstances, and help organise insurance solutions around the way your business operates.
Your Insurance is Becoming More Complex
Businesses rarely stand still. You might start with a small team operating from one premises. A few years later, you could have additional locations, more employees, larger contracts, new technology and customers in other countries – each change can affect your insurance requirements.
Similarly, for households, building materials, market values, wealth and investments can all have an impact on your insurance.
A broker can help interpret those changes and consider whether your existing arrangements need to be reviewed.
One Policy Rarely Covers Every Business Risk
It is tempting to think of business insurance as one overall product. In reality, different policies can respond to different risks.
A business could need Employers’ Liability, Public Liability, Professional Indemnity, Property Insurance, Cyber Insurance or Motor Fleet insurance, depending on its activities.
There may also be specialist considerations around Directors’ and Officers’ Liability, Trade Credit or other areas.
A broker can structure these requirements so that the different elements of the insurance programme are considered together.
Understanding What Your Policy Actually Says
Insurance wording can be difficult to interpret, particularly when you are dealing with exclusions, conditions, limits and specific definitions.
Suppose your business signs a contract requiring a particular level of Professional Indemnity insurance. It may not be enough to simply have a policy in place. You may need to consider whether the policy terms and limits align with the contractual requirement.
In addition, for households, there may be restrictions on contents limits, or conditions around security for your property.
A broker can help explain policy terms and discuss relevant insurance considerations in straightforward language.
Identifying Potential Gaps in Your Arrangements
Sometimes the most useful insurance conversation is about what is not immediately obvious. A good conversation with your broker will help them to get to know you, your home and business and understand what insurance you have in place.
For example, a business might have insurance for its premises and equipment but not have considered whether new contractual obligations could affect its insurance. Another might have increased its workforce without reviewing its wider insurance arrangements. For a company that has become increasingly reliant on technology, cyber risks could also warrant closer consideration.
A household may start employing staff or be planning some significant property developments, both of which may require specific cover for. Perhaps they have recently started investing in wine, which requires temperature-controlled storage and so may benefit from some risk management advice.
By understanding your circumstances and insurance arrangements, a broker can help identify potential areas where your insurance arrangements may need further consideration.
Access to Insurer Relationships
One of the practical reasons for choosing to work with an insurance broker is access to insurance markets.
Depending on the broker and the type of risk, they may be able to approach several insurers and specialist markets. This can be particularly relevant where a business or property has unusual circumstances or operates within a specialist sector.
The available options will depend on the risk and the markets accessible at the time. A broker cannot guarantee that an insurer will accept a particular risk or offer specific terms.
Support Throughout The Policy Lifecycle
Insurance should not necessarily be a once-a-year conversation. Your business can change significantly between renewal dates, a new premises, acquisition, additional employees or major contract could all affect your requirements.
A broker can help review whether these changes affect your insurance arrangements and consider any updates that may be needed, provided they are kept informed of relevant developments within your business.
And if something goes wrong, your relationship with the broker can extend to claims support. Depending on the service provided, they may help organise information, present the claim and liaise with the insurer.
Situations where a broker can add value to businesses:
A broker can be particularly useful if your business has:
- Multiple premises or locations
- High-value assets
- Specialist activities
- Complex contractual requirements
- Significant cyber exposure
- International operations
- A growing workforce
- A fleet of vehicles
- Changing ownership or investment arrangements
These circumstances do not automatically mean you need a broker, but they can make the insurance process more involved.
Is Using a Broker About Finding The Cheapest Policy?
Not necessarily. Price is an important consideration, but it is only one part of an insurance decision. The level of cover, policy wording, exclusions, limits and insurer requirements can all affect whether an arrangement is appropriate.
A broker can help you understand the options available and consider them against your circumstances, rather than looking at premium in isolation.
Building a Longer-Term Relationship
For many, the value of a broker develops over time.
As your organisation changes, the broker becomes familiar with its activities, risks and insurance history. That can make future conversations more informed, whether you are reviewing an existing programme, entering a new market or dealing with a claim.
For personal insurance, your broker can get to know more about your lifestyle, investments and future plans. By keeping them informed of relevant changes, they can help you review whether your insurance arrangements remain appropriate. They may be able to highlight market developments that could be relevant to your circumstances.
The result is an ongoing conversation about your insurance requirements rather than simply a transaction at renewal.
Your Questions, Answered
That depends on your circumstances. A broker can be particularly useful where insurance requirements are complex, risks are changing or specialist markets need to be considered.
Broker remuneration varies. Some brokers receive commission from insurers, while others may charge fees or use a combination of arrangements. The applicable remuneration should be explained as part of the broker’s terms and disclosures.
Yes. A broker can review changes to your business and personal circumstances, update relevant information, approach insurers and discuss available options before renewal.
Summary
An insurance broker can help businesses navigate complex risks, interpret policy requirements, identify potential gaps, access relevant markets and review insurance arrangements as circumstances change over time.