What is an Insurance Broker and Why you Should Use One?

If you're unsure about the insurance cover you need for your business, an expert like an insurance broker who knows your industry, the insurance market, and the products inside out is invaluable. Most insurance brokers should provide you with impartial advice as they are not tied to any one insurer unless it is a special scheme arrangement for a specific group of risks. This means they will search the market for you to find the most appropriate insurance cover for your needs at a competitive price.

What is an insurance broker?

An insurance broker is a professional who represents you, the customer, and not the insurer. They will be a registered adviser and expert in arranging insurance policies. Insurance brokers are intermediaries between customers and insurance companies, working with multiple insurance companies to find the best solutions for their clients based on their needs.

What’s the difference between an insurance broker and an insurance agent?

Insurance agents and insurance brokers both assist in helping you to purchase insurance policies. However, an insurance agent will work for a single insurance company, selling policies exclusively from that company. In contrast, insurance brokers represent individuals and businesses helping them to compare and choose policies from a range of providers.

What does an insurance broker do?

A specialist broker provides advice and explains what your insurance policy covers and what it does not cover. They have a duty of care to provide clear and suitable advice about the products you might need. They will:

• Get to know your business using their experience and knowledge related to your industry.
• Assess your risks and potential exposures to recommend the right protection and level of insurance coverage.
• Search the insurance market to find a policy from an insurer that meets your needs and is within your budget.

How to find an insurance broker

It's important to find a specialist broker who understands your industry. A specialist insurance broker will be familiar with the best insurance company to approach based on your requirements rather than flooding the market, which can negatively influence how your company is perceived in the insurance industry. They will also know how to present your business clearly to get the right cover at the right price.

Are insurance brokers worth using?

You may be asking yourself this question as well as:

"Will I save some money using an insurance broker?"

"How much do insurance brokers charge?"

"Do I need an insurance broker?"

When protecting your business, we advise you to choose a broker specialising in your sector. This is important for their experience, access to the correct insurance providers, and guidance and support.

Why use an insurance broker?        

Whilst it can sometimes be easier to go direct to an insurer, and there may be some cost savings, it doesn't always compare with the peace of mind you may get from expert, impartial advice. These are just some of the benefits of using an insurance broker:

• Expert knowledge to identify cover that you may not have considered.
• To make sure you're not paying for more cover than you need or excluding any necessary protection.
• Present your business to insurers clearly and correctly so they can offer the most appropriate products at a fair price based on your needs.
• They will shop around for you to help find the cover you need, saving you valuable time in the process.
• Continued day-to-day support.
• Act on your behalf to manage claims and achieve fair settlements.

Insurance brokers often have insurance industry qualifications from the Chartered Insurance Institute, which ensures they have the necessary expertise and adhere to professional standards. Additionally, they work closely with insurance underwriters who evaluate risks and aim to secure the best terms for your insurance policy based on your business needs.

In the insurance industry, having a broker can often make a significant difference, particularly for businesses with complex needs. Their understanding of risk management and the nuances of different insurance policies can provide tailored coverage that meets specific requirements.