Why use an insurance broker?

When it comes to buying professional insurance, we get the feeling most people think the man in the middle is a hindrance, not a help. So why use an insurance broker?

The problem is, buyers tend to think that any additional link in the chain means more cost and hassle to them. And insurers encouraging people to ‘go direct’ only serves to rubber-stamp this feeling.

But don’t pick up the phone to that one-stop, do-it-all, household name insurer just yet. Not surprisingly, we reckon there are compelling reasons to use a specialist insurance broker instead.

5 good reasons to use an insurance broker:

1. Service

Brokers aren’t tied to any one insurer. A quick chat with you is usually all they need to find a suitable policy from the insurers they work with. That means you get the right cover at the right cost.

We’re guessing you've probably not studied the technical ins and outs of, say professional indemnity insurance. A lot of brokers have, however, and that makes them an expert. You'll get the benefit of that expertise when they talk to you about the cover you need.

That same expertise applies to mid-term changes and queries too, with the added bonus that most brokers prefer to deal personally with the same customer whenever possible. That’s not always the case with large, direct operations using call centres.

2. Cover

Direct insurers can only offer you one policy: theirs. It’s often written for a mass market and it’s difficult, if not impossible, to tailor to your specific needs.

Unusual or multiple business activities, high-value property, exceptional contract requirements or just a box you can’t tick could all mean you need something different.

A broker recognises extraordinary requirements, identifies the cover you need, arranges it with an appropriate insurer and makes sure your documents are present and correct too.

Business insurance is pretty complex. If you’re not sure where to start, asking an impartial expert to help makes sense. That way you get the insurance you need, without the extra stress.

3. Price

You’d be forgiven for thinking that this is where the broker falls down. You must be paying for that extra link in the chain, right?

Well, contrary to popular belief, brokers can offer cheaper policies than direct insurers.

How? It’s simple: insurers can give different (lower) rates to brokers than to their direct customers. That might seem odd but it’s for a good reason.

It's because business through brokers is a lower risk for insurers. Brokers are professionals and their job is to properly assess their customers’ risks and find suitable cover. The theory is that insurers use brokers to choose the right policy with the right cover at the right price for any given customer – avoiding claims and maintaining the insurer's income. And it works, too.

4. Claims

This is probably the best reason to use a broker. Frankly, when the worst happens, you need all the help you can get.

A broker represents you, not the insurer, and it’s their job to make sure your interests are covered. Business insurance claims can be complicated and time-consuming. The benefit of having an insurance professional there to guide you, monitor the claim’s progress, and make sure everything happens when it should, can’t be underestimated.

Brokers understand the technicalities of your policy and, in the event of a disputed claim, can argue the case on your behalf with the insurer. A good, respected broker really can be the difference between an insurer paying a claim and not.

5. Regulation

The insurance industry is highly regulated. Especially for brokers. This regulation is great for you as a customer, though. It protects your rights as a consumer, and makes sure you’re getting the advice and service you deserve.

Before you choose a broker, make sure they’re regulated by the Financial Conduct Authority (FCA). The FCA ensure that brokers follow a set of guidelines designed to protect customers.

You should also check whether they’re authorised by the FCA to offer ‘advised sales’. This means they can use their expertise to provide you real advice on what kind of insurance you need. To do this, a broker has to complete a strict vetting and assessment process. So you know they’re the real deal.

Keep an eye out for brokers that belong to trade bodies too. Like the British Insurance Brokers Association (BIBA). BIBA, and other trade bodies, have standards and practices their members have to meet.

Bang for your buck

All in all, there’s no reason why you shouldn't use an insurance broker rather than going to an insurer direct. In fact, find a good one and we reckon you’ll never go back. It can save you time, money, and leave you with a better level of cover. You’ll probably have an easier time if you need to make a claim too.

Ready to get your business insurance through a trusted broker? Give us a call on 0345 222 5391.

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