Business insurance is essential but choosing the right product and ensuring that it provides the cover to meet the unique requirements of your enterprise can be difficult. To top that off, understanding the different products offered by a variety of carriers is complex and complicated.
Most business owners simply don’t have the time to research and compare different products to find the right fit and end up with an insufficient cover. An insurance broker can take all the complications and hard work out of choosing the best insurance product for your business.
There are many ways in which an insurance broker can add value:
1. Determining Risk
Risk management is one of the key roles that an insurance broker will play in providing value to your business. Assessing your business to understand where the greatest risks lie and how best to manage these risks is crucial. They will help you decide where insurance is critical as well as identify areas where other measures can be used to reduce risk.
The broker will then go ahead and compare different business insurance products to find one that suits the needs of your business. Ideally, a broker should compare products from different insurance providers to find a product that provides the greatest value. Some insurance brokers act as agents for specific carriers and will not provide a comprehensive benefit and cost comparison to ensure your business is getting the best product on the market at the lowest cost.
Value is of major concern when choosing an insurance product. Your insurance broker will ensure that you are getting sufficient cover that won’t leave you holding the bag when disaster strikes. Value is determined by how much benefit you receive from the insurance policy relative to the premiums you will be paying for that cover.
There are a variety of different categories for cover available to meet the different needs of businesses in various industries including:
- Liability Insurance
- Professional Indemnity Insurance
- Malpractice Insurance
- Property Insurance
- Business Income Insurance
- Worker’s Compensation Insurance
- Commercial Driver’s Insurance
- Cyber Insurance
A comprehensive business insurance policy should provide cover for most of these categories. The business broker will make sure that the policy prioritizes cover for the areas where your business is most at risk.
2. Understanding Business Insurance
One of the key roles of a business insurance broker is to ensure that you understand your business insurance policy.
- What you are covered for and what limits or restrictions apply to that cover. Is there an overall limit that you can claim on an annual basis or will you need to co-pay or pay a deductible when you claim?
- When you can claim, how much you can claim for and the claim procedure.
- The terms and conditions of the policy and what events could negate cover or result in the termination of the policy.
- Any value-added services such as legal representation that is provided by the insurance carrier.
A misunderstanding of business insurance often leads to the misconception that the business is covered no matter what. In reality, many businesses have suffered due to taking out insurance that does not provide the cover they need or does not provide for their unique risk profile.
Having to pay for lawsuits, damage to property, accidents, loss of income for the business or any other major event can easily bankrupt a business.
Understanding what your insurance covers as well as the restrictions and limitations involved can assist you in planning for events that are not fully covered.
3. Ongoing Service
Your broker doesn’t simply disappear once you have signed on the dotted line and taken out suitable business insurance. They are there to provide you with ongoing service.
If you need to upgrade your business insurance policy as your business grows and expands, a quick call to your broker will ensure that you get the increased cover that you need. If you simply want to make some changes to the policy for any reason, the same applies.
They will know if and when you can upgrade or make changes. Most insurance providers only allow upgrades or changes upon the anniversary or renewal date of your existing policy. A broker can however use their influence with specific insurance providers to get the changes made as quickly as possible.
Your broker is also there to answer any questions or queries that you may have. If a new product comes along that seems attractive, you can ask your broker to compare it with your current business insurance to see which would provide the greatest value. A good broker should always stay up to date with new products and changes to existing products and constantly be looking for a product to better suit your business needs.
When the time comes to claim from your insurance, your broker will assist you with the process. Many claims to insurance companies are denied simply because the incorrect procedure was followed or insufficient information provided. If you have a broker, you should never have to deal with your insurance provider directly. The broker is there to communicate and deal with the insurance carrier on your behalf.
4. The Cost
Many business owners are under the impression that using a broker is going to be an expensive exercise. After all, you are paying for their expertise and experience in the same way that you would pay an accountant or business lawyer for their expertise.
However, this is not the case with business insurance brokers. In fact, you should not be paying a broker anything. The insurance provider pays the broker a percentage of your insurance premium or commission. They pay this commission because the broker provides them with value. Brokers act as agents or salespeople for the specific insurance company and they provide ongoing service to their clients taking the weight off the insurer’s shoulders.
Their commission is already worked into the cost of the policy. But you will still be paying the same for your business insurance if you had chosen not to use a broker. In essence, you are getting a valuable service free of charge, and not taking advantage of the benefits of using a broker is going to cost you in the long run.
This said, there are times when the insurance broker will charge a fee. This fee is normally to risk assess the business and to implement a risk management plan. Remember that a broker is not just there to provide you with insurance but also other alternatives to ensure your business makes provision for all risk-associated eventualities.
5. The Issue Of Time
As a business owner, your main function is to ensure the optimal operation and overall success of the business. Time is the one commodity that you can never get back. The time that you spend dealing with insurance-related issues takes you away from this critical role.
A business insurance broker gives you back the time you need to focus on your business and ensure that it is functioning optimally and turning a profit. At the end of the day, it is you, the business owner, who must answer for the overall success (or lack thereof) of the business. Investing time in your business is one of the most important factors that will determine your success.
No matter how big or small your business, it makes sense to use the services provided by an expert and experienced business insurance broker. Their expertise will provide you with constant value no matter the pitfalls or growth that your business experiences along the way.
Aaron Green is a director and senior insurance broker from Fundamental Insurance Brokers