Why use an insurance broker?
With the ability for businesses to obtain among others business insurance, public liability and now professional indemnity on line, why would you want to use an insurance broker? Well, we have put together three of the main reasons why we believe it is critical to use an insurance broker:
Professionals in their field
You wouldn’t undertake your own legal work and more than likely not file your own accounts at the end of the year or manage the marketing of your business yourself? you would utilise the services of a professional. So why would you not do so with your insurance program?
Whilst insurance brokers do a number of things one of the key areas which a broker can assist with, but is often overlooked, is the handling of the claim process for you.
In 2015 a study was commissoned and published which among others things there was on average 1.9 claims per small business in that year! http://www.insurancecouncil.com.au/assets/report/2015%20-%20non-insurance%20in%20the%20small%20to%20medium%20sized%20enterprise%20sector.pdf
Dealing with claims can become protracted, expensive and stressful. By utilising the services of a competent insurance broker, then they take this on as part of their standard service offering.
Navigating the Minefield of Policy Wordings
Insurance policy wordings are notoriously difficult to read. Often, they require the reader to flick back and forth through the document to ascertain the meaning of the words used and what is covered, whether there are any exclusions or possible ‘writebacks’ of cover (this is where the insurer gives back the cover earlier excluded).
As well as the complexity of wordings, some of them resemble small novels. This past week I have been undertaking a review for a prospective client, their business insurance policy wording was more than 70 pages in length! Do you have time to read and understand the in's and out's of that document?
The problem with not understanding what you are covered for can lead to incidents where you are not covered when a claim is lodged, leaving you to potentially handle the claim and finance any settlement yourself. A good example of this is within Professional Indemnity policy wordings which we were comparing recently. When reviewing the documents for a particular industry we found numerous examples of where standard activities are excluded (wholly or partially) from the cover.
It is an insurance brokers job to understand and explain the policy wordings to you, outlining the areas where there could be gaps within the cover, and if these exist to seek alternative options or have the insurer put them back into the policy where possible.
Pricing & Cover
Many people utilise the ‘direct providers’ as they believe that they can get cheaper quotes by not utilising the services of a broker. In some instances, this is of course true, however not as often as you think. Over the past two weeks we have provided quotations on both business insurance and professional indemnity insurance which not only beat the pricing of the direct provider but also had enhanced cover. The reason we can do this is the sheer number of insurers which we have access to.
Recently I read recently ASIC recommend that you should get three quotes for comparison purposes, how much time do you have to do that? Whilst I cannot speak for other brokers we strive to get a minimum of five comparable for you where possible. We can do this as I said because of the number insurers whom are available to us and that we are committed to getting the very best deal for our clients.