Businesses come in all sizes and the Commercial Insurance Broker’s role will differ depending on how large the client company is and the level of its insurance expertise.
An engineer shop in a side street may have a different approach to commercial coverage than a multi-national corporation with many subsidiaries. However, the basic task of a broker will be the same for large corporations as for individuals: to help clients arrange sound insurance programmes that meet their specific needs.
A Business Insurance Broker will help manage insurance for a small company in a way that is very similar to an individual. It is likely that the relationship with the directors of the company will be personal. They can be considered as individuals who have different insurance needs due to their involvement in the company.
Insurance brokers must ensure that their clients have the mandatory commercial insurances they require to operate a legal business.
To protect employees, employers must arrange for employer’s liability coverage. Motor insurance is also necessary. A specialist engineering insurer will usually arrange for the periodic inspection of plant and machinery by the business under an engineering inspection contract.
Insurance for fire and consequential loss will be vital to ensure that the company is protected against any loss of earnings until the business is back on its feet. Next, there are all other insurances that a business may require, including public and product liability, theft, money insurance, goods-in-transit and marine insurance, all risk covers, fidelity guarantee, and others. A broker might also be requested to provide insurance coverage for staff, such as a group life or pensions scheme or personal accident or permanent insurance.
Brokers with industrial firms are often required to provide insurance for a variety of clients. This makes it difficult for them to only specialize in one type of insurance. While the individual may be content to only consult a broker about life and motor insurance, an industrial company will likely want one source of advice regarding all aspects of its insurance needs.
The client’s company will not be interested in standardised business insurance packages or small-business insurance packages. It will prefer policies that meet its specific needs. The broker must have a deep understanding of the client and be creative in finding insurance solutions. A Commercial Insurance Broker may need to convince an insurer to accept a new approach to a specific insurance issue.
A small risk spread may not be an issue if the company is large enough to have its past record rated rather than being a member of a trade that is rated a class in an SME insurance package. A company that reaches this size may be interested in extensive self insurance. It is now part of the broker’s job to assist such clients in developing appropriate self-insurance plans, as well as to advise them on risk management strategies to reduce the risk.