All Policies Are Not Created Equal

I’ve just had another business discover that their “substantially cheaper” proposal from another “specialist broker” was fundamentally different from my option, and so it wasn’t a like for like comparison at all – unfortunately, the issues only came to light after cover was arranged, and is likely to result in most of the cost differences being eroded in increased excess payments, as well as leaving a very bitter taste with the business owners. Another client had a proposal from the same broker earlier in the year which also seemed to offer substantial savings, but the fact that there was effectively no cover for damage to their property or loss of revenue was only made clear to the business owner when I reviewed the proposal for my client. I even suggested getting written confirmation from the other insurers (rather than just from the broker) that this restriction had been removed prior to cover being arranged, and agreed to keep the client covered past renewal date whilst the broker attempted to get the exclusion removed, which they ultimately failed to do.   

These scenarios do little to improve confidence in insurance, where there is a perception in some quarters that insurers will try anything to avoid paying claims. The reality is that some brokers still do not make it clear enough that the policies they’re proposing contain some significant exclusions, which in the latter case above, exposed the business to the possibility of having to fund costs that would have likely led to the company to cease trading in the event of a major loss.  

Regardless of the sector in which you operate, it’s vital that when you’re comparing insurance proposals from different sources, you’re given sufficient information to make an informed decision, and not just instructed to read policy wordings and quote schedules to make sure you’re happy. As ever, the devil’s in the detail…