WHY USE AN INSURANCE BROKER

• In this modern Financial Services arena, Insurance Brokers are operating in a highly legislated and regulated business.  They are not only selling a policy, but also selling advice. An insurance broker is required to advise you that any insurance policy they recommend is in line with your demands and needs and is the brokers’ recommendation.
• If you buy insurance directly from an insurance company either face to face or online you are buying the cover they have available, usually under a standard policy wording.  They owe you no duty of care. They have no duty to tell you that the cover meets your demands and needs.

The difference between these two distribution models cannot be over-stated. Particularly in the SME business sector. In our opinion, any business of any size should insure through a broker.  Examples of this opinion follow.  There are of course many more examples.

Security – A broker will visit you and survey your premises, or carry out detailed fact finding, to ensure that the physical security is agreed with insurers. A direct insurer will merely embed a “Statement of fact” within a 50 page policy document. Non-compliance could mean – NO CLAIM.

Storm Damage - Certain insurers have started to define storm as force 10 (according to the Beaufort scale) it is expressed in miles per hour, but, the speed indicated makes it force 10. Meteorological experts state that wind damage will occur on land at force 8-9. Insurers use data from weather stations, sometimes many miles away from the damaged site and will use this to define STORM.  So, your roof has blown off and the nearest weather station shows Force 9 – NO CLAIM. Therefore, a prudent broker should avoid insurers with this restriction.

The Insurance Act 2015 - This puts an onus on the POLICYHOLDER to provide insurers with a “Fair representation of the risk” that they are being asked to quote for and perhaps effect insurance at a  later date.  We struggle to see how a business can do this without the services of a Broker.

A Broker – An insurance broker is a professional advisor and this carries with it a responsibility to ensure that their clients’ assets and liabilities are protected in the event of an insured incident.