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How To Choose The Right Insurance Broker for your Business
Your company has many facets that need thinking about individually. You may already have your current insurance schedule to help you think of what might need cover but your company profile and the economic and political climate will have changed. An online policy will not be able to look at your individual details, the equipment you own and its maintenance. It will not prompt you to add on that new appliance you bought, or to check that the current ones are up to date on their servicing. Have you covered all the regulations that you will need for being an employer? Have you considered the increased terrorist threat, employees health and sickness days or cyber risks and GDPR?
After a long busy day, have you the energy to start filing through the intricacies of your company details? Online insurance for your personal needs such as a car or pet insurance are easier because most of us need similar cover. A business policy needs to be bespoke. It is your responsibility to make sure everything is covered and if it is not correctly covered, the insurance company will not pay out.
Your broker is typically paid commission from the insurance company so you will usually not be charged for his/her service so it makes sense to use their expertise. A direct company will sell their set policy without telling you about products across the industry. Beware also of unqualified sales staff selling a product by reciting a rehearsed script.
Read your broker’s testimonials and ask about their experience both across the business community and within your own sector. Qualification such as ACII or Dip CII is important but years in the business allow the broker to have learned all the potential mistakes that could arise and how to prevent them.
Multinational broker or small broker? Check that your broker has access to a good market of insurance companies so they have the range to find you a good deal. Small local brokers know the geographical and economical needs of your area and have a vested interest in good reviews and customer service. There are a limited number of insurance markets available for many commercial insurances so you are unlikely to find a better deal by selecting a larger number of brokers. Remember to ask brokers about their risk management services, as insurers value the effort clients make in managing their own risk and this is reflected in the pricing and terms offered.
Sometimes much larger brokers are committed to working with a top tier of insurers where as smaller brokers may have much wider access within the insurance market meaning that often, much better premium savings are achieved without comprising your cover. Commission payments to all brokers vary and smaller brokers may not command such high levels as the larger brokers. This means this saving can be passed on to you.
Also in place of commission, a fee may be charged which is a more transparent way of knowing what your broker is earning for their services. This can be a lot less than the commission insurers pay brokers so you may achieve a good saving on your premium spend. You will be able to speak to a local broker directly rather than having to plough through a telephone system and talking to a different person every time. The broker is not your insurer so a small broker does not mean your insurance company may go into receivership.
Is cheap the best? Not necessarily, if your broker does not fully understand your business activities or exposures, the wrong cover may be put in place. Their misunderstanding may mean you obtain a cheaper insurance premium but you may find that you are not insured which will cost you more in the long term.
A thorough review of your business and completion of a detailed risk assessment may result in your broker achieving a premium saving as a better picture of your business can be presented to the insurance underwriters. It is important to spend time talking with your broker about what you find important for your company and personal wishes so that you can find the most streamlined and cheapest option whilst keeping you fully insured. More information about Business Insurance can be found by connecting with Managing Director of Holloway and Gauntlet -Dean Holloway
Should I stay or should I go?
Should you change broker every year or show loyalty? It is worth asking another broker for a quote to compare but remember that your broker should be working hard to reduce your premium automatically, not cutting their price if another broker has worked hard to get a competitive premium. Changing insurers every year can become detrimental so unless your business changes actives you shouldn’t change provider on an annual basis. Insurers will often put more attractive terms forward for a company who has a minimum three-year review process, rather than one who switches provider every year
Does you broker do they following?
- Regular updates on the claims and purchasing process.
- Demonstration of work to reduce your premium.
- Range of packages to increase choice or reduce premium. Awareness of advances in products available.
- Renewal discussion entered 3 –4 month before renewal date.
- Broker availability and willingness to work out of hours– Can you speak with your broker at the weekend?