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A general insurance broker is a licensed professional who helps businesses manage and transfer risk.
General insurance protects business’ profits, assets, services, contracts, data, funds, employees, trading partners, regulators, and receivables.
This is distinct from life insurance which protects an individual person’s income in the event of sickness, disability or death, or can be protection for a business for critical directors or employees. Insurance brokers are professional advisors who work on behalf of their clients (i.e. business owners) and not for insurance companies.
So what can you expect when you engage an insurance broker, and how can you spot a good broker?
Let’s first start by looking at what an insurance broker does. There are typically 5 ways an insurance broker will help you.
An insurance broker will review your business’ risk and provide advice as to which products and the type of cover are best suited to you. They will take into account things like your insurance budget, risk tolerance, assets, service offering, and key contracts to understand your unique needs when recommending particular insurance policies and covers.
Insurance brokers have access to a wide range of products from insurers and underwriters within Australia and overseas. With your risk assessment and requirements in mind, your insurance broker will search the market to find the options that are best suited to you. Due to their complexity, many business insurance products are not available directly from insurance companies and require you to engage with a broker.
Every business is different and your insurance requirements will be too. An insurance broker will complete due diligence on insurance products to ensure they’re fit for your specific requirements and provide you with the necessary cover.
Insurance brokers will work for you to negotiate the best possible premium, terms and conditions. A broker will prepare a customised insurance program for you in which they’ll design the policies and negotiate the terms with the insurance companies on your behalf.
Once your insurance policies are in place, a broker will continue to be your advocate ensuring your cover remains relevant to your needs. Importantly, they will also provide support when you need it most - during time of claim - to ensure the best possible outcome for you and your business.
As with any professional advisors, you’ll receive varying levels of service depending on the quality and experience of the individual and/or company.
So what makes a good insurance broker? Here are 8 signs you’re dealing with a good broker.
By looking beyond the usual 12 month cycle, brokers can connect you with suitable insurance companies who have the ability to accommodate your changing needs. This means the broker should understand your medium to long-term business plans in order to select appropriate and stable insurance partners.
A good broker will be familiar with your industry and understand any intricacies that go with it. They will ideally have clients similar to your business and have dealt with similar insurance placements previously.
As a business owner, you may unknowingly be in breach of your insurance policy by signing contracts with your clients, customers or partners. A good broker will review insurance and indemnity clauses in your business’ contracts to ensure terms and conditions aren’t overly onerous and negatively impact your insurance policies. It is the broker's responsibility to ensure this does not occur, or if it does, the potential impacts are known to inform your decision making.
A good broker should set out key dates in the annual renewal cycle to identify when tasks and deliverables are required and who is responsible for them. This can include the type of information that needs to be collected; who is involved in collecting it; when this is required by; when insurer negotiations are to take place; when you’ll receive feedback on your renewal program; and the frequency of ongoing service you’d like to receive from your broker (depending on the level of complexity, this could be as often as daily).
For complex insurance placements, you should be able to engage your key insurance partners with the assistance of your broker. This allows you to have direct access to the insurer (and vice versa), to help share information and build trust. It also helps in the event of a claim as the business operations will be clear to the insurer meaning less ambiguity.
A good broker will also be able to help you identify risk in other areas of your life including income protection, life and disablement insurance, legal planning for wills, business succession and key-person risk, for example.
Following on from item six above, your broker should have a network of service providers to assist you should the need arise. This includes loss adjusters, building contractors, forensic accountants, cyber security specialists, lawyers, security companies, life insurance brokers / financial planners, risk consulting, HR professionals, quantity surveyors, and valuers, among others.
Brokers should share information that is relevant to your business and its exposures. Examples could be a recent judgement affecting policy interpretation or trends regarding cyber fraud and how to better secure your network.
In short, a good insurance broker will create an ongoing relationship with you, rather than treat you as a one-off transaction.
They will give you unbiased advice, can save you time and money, and give you confidence that your business has adequate insurance coverage.
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