Looking for insurance? You've got two options: go direct or choose an insurance broker.
A broker is the middleman between you and the insurer. They're on your side, and they have the technical and industry knowledge necessary to get the best cover at the best price.
But while it's true a broker eases the headache of getting insurance, you still have to find one. They're not all created equal, and some will be better suited to deal with your business than others. So, how do you choose an insurance broker that's right for you?
4 key questions to help you choose an insurance broker
Here's what to consider:
1. Are they regulated by the Financial Conduct Authority (FCA)?
If not, walk away. The FCA is responsible for making sure companies do business ethically and transparently. Most businesses make it clear they're FCA regulated. If you can't see anything on their website, proceed with caution.
You can contact the FCA to check if a business is registered with them (we are!). Using a broker who's not FCA regulated is a bad move – you have no guarantee they're on your side.
2. What's their specialism?
Different brokers specialise in different products and different occupations. The more specialised your broker, the better. If your broker mainly offers car and home insurance, but dabbles in a bit of professional insurance, their knowledge of the subject is likely to be generic, not specific.
Where possible, choose an insurance broker who's an expert in your industry. That's because areas like architecture and engineering will have very different risks from ones like accounting and admin. The more clued-up your broker is, the more clued-up you'll be.
3. What's their claim service like?
Insurance is there for when things go wrong, so you need to know you'll be treated well if it does. Find out how well supported you'll be when you need to make a claim. The best brokers have the same person dealing with your claim from start to finish, ready to go toe-to-toe with the insurer on your behalf if needs be.
4. Can they answer your questions?
Ask your broker basic things about what cover you need and why. If they struggle for answers, it might be they're not as well-versed as you need them to be. No one knows everything, of course, but you need guidance and advice from an expert if you're to get the protection you need.
What else?
Since there are more brokers than insurers, lots of brokers have an 'agency' (a formal agreement to do business) with the same insurer. The problem here is that most insurers work on a first-come-first-served basis.
As an example, let's say you ask broker A for a quote, and they approach ABC Insurance Ltd for terms. If you then ask broker B for a quote, and they also approach ABC Insurance Ltd, you're out of luck. You won't get two quotes.
Once ABC Insurance Ltd has quoted through broker A, you'll have to go through them to get your cover. Although that's not a big deal in itself, it does mean you have to be sure you don't prefer broker B.
If you're not sure, and you really want to change, it's possible to do so by writing a 'letter of appointment' to the insurer. This simply states you authorise broker B to act on your behalf. Although it's a bit of a faff, a decent broker will put the letter together and send it for you.
Value, not cheap
Just to clarify, price comparison websites aren't the same as brokers.
These companies (called 'aggregators') simply compile quotes from any given section of the market and leave it up to you to decide. A broker approaches specific insurers for specific quotes to fit your business. That makes a big difference if there's a claim.
We can't stress enough the importance of choosing a broker you're comfortable with. If you have any questions about your cover, or you think you might have a claim, your broker's your ally. If you're not comfortable asking them for help, it'll be your business that suffers.
For more advice on any of this, feel free to give us a call on 0345 222 5391.
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