How strange it is that no-one would recommend you go into court without a solicitor, nor tackle Her Majesty’s Revenue & Customs without consulting an accountant? Insuring your business is not easy. Some insurers seem to believe that the idea of saving money on the “middleman” appeals to more than our instincts. This is a common theme used by insurance companies to promote their products on television.
The reality is that business risks can be very complex. This means that it’s important to get independent advice about how to get the right insurance. This is not the same as buying a tin full of beans. What exactly are the benefits to using an insurance broker for your business? Consider these three areas.
1. Placement of the business, obtaining prices: In general, an insurance broker adds value by providing personal contact and making sure your business insurance needs are met. A broker who is a good one will offer free advice about areas like risk management. This includes tips on how to improve your risk profile and reduce your premiums.
An average broker will have full access to the entire market. This is especially important for high-risk trades and businesses with needs specific to their trade area. These are two risks that are not covered by standard business insurance policies. Alarm installers (liability if the alarm does not go off); and hairdressers (liability if there is any malpractice in treatment).
This is possible in more cases than you might think. In each case, a broker can access a plan that provides the exact level of business insurance coverage required. It is not available from an “all-inclusive” insurer.
2. Making a claim: Is it possible for an insurance company to be very pleased if a company insures directly with that company? What happens when there is a claim? You can take it or leave. You have no recourse if the insurer claims your claim isn’t covered because you didn’t purchase the right type of business insurance.
You can also consider the alternative. If you hire an insurance broker, you will have someone to help you with your claim. After all, they want to keep your business and have a reputation that they need to protect. A broker will assist you in putting together your business insurance claims and will also be your advocate for the insurer if necessary. Your broker will know more about the business than you do. In cases of uncertainty or doubt, they can often help you to resolve matters to your advantage by bringing the insurance company’s wider account to bear.
At the end of it all, if you are unhappy with the advice you received, your broker is someone you can turn to for help.
3. Renewing your cover(s): When your business insurance cover is due for renewal, a broker will make the relevant enquiries in the market to ensure that cover and price remain up to date and competitive. It is possible for things to change rapidly, especially for new businesses. An insurance broker will go over the facts with you to make sure the coverage remains relevant to your needs.
Cutting out the middleman can result in a loss of business advice, support services, impartiality, and other valuable business advice. Your business could be in serious danger if you do not cut out the middleman. It could also cost you more money. But what about TV ads? Television advertising can be very costly. Although they may not use your premiums for a middleman, these insurers are still using them to make ends meet for advertising executives.
