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When it comes to business insurance, it’s easy to get overwhelmed.
There are so many different types of business insurance to choose from, and there are also a range of pitfalls – including underinsurance – which need to be avoided.
It’s understandable, then, that some small business owners, faced with so much choice and complexity, decide to enlist expert help to navigate the choppy waters of business insurance.
Enter the insurance broker: a third party insurance buff whose job it is to help you to find the right insurance package for your business.
If you’re finding it difficult to make sense of the jargon, or you have non-standard requirements for your business insurance, a broker may be able to assist you. Alternatively, you may just want to talk everything through with someone.
What is an insurance broker?
Insurance brokers are professional advisers regulated by the Financial Conduct Authority (FCA). Insurance brokers have expert knowledge about the insurance industry, and as such, may be able to help you find an insurance policy that is tailored to the specific needs of your business.
Brokers act on your behalf when dealing with insurance companies. This means they can organise your initial policy for you. Some brokers will also talk to your insurer on your behalf if you have to make a claim.
If you’ve already taken out an insurance policy, a broker may also be able to help you change the policy to keep it in line with the needs of your business. This way, you can prevent underinsurance – which can occur when your business grows disproportionately to your level of cover.
If a broker finds a suitable policy for you, they are either paid commission by the relevant insurer or collect a fee from you for their services.
» MORE: Everything you need to know about business insurance
Do I need a business insurance broker?
You can take out a business insurance policy on your own – without enlisting the help of a broker.
However, you may find it useful to talk to a broker if you are unsure and would prefer advice on which types of insurance could be most suitable for your business.
Since a broker has expert business insurance knowledge about the ins and outs of business insurance, they can also help explain exactly what is and isn’t covered by a particular policy.
This also means they can advise you on where you may need more or less cover and tell you whether you are already insured by an existing policy. They can also highlight areas of your business you may have forgotten to think about.
If you have specific, non-standard requirements, brokers can try to find specialist insurance to suit your needs.
» MORE: Do I need business insurance?
Pros of using a broker for your business insurance
Hiring a business insurance broker could help you choose the right insurance policy for your business. Using an insurance broker could provide you with:
- independent advice from an expert
- a policy designed for your specific needs
- a wide choice of deals – brokers can approach a range of insurers to find the best insurance deal for your business
- specialist insurers to fit the precise needs of your business, if necessary
- help and support after you’ve purchased a policy – your broker can continue to assist and represent you during the claims process
Cons of using a broker for your business insurance
While there are many reasons why you might want to consider using an insurance broker, there are also a few drawbacks.
Keep in mind that using a broker:
- is less direct than going to a price comparison website or an insurer – you may not be able to get an immediate quote
- may involve paying a fee for their services, which could make it more expensive to use them than going direct.
» MORE: How to Pick the Right Small Business Insurance Policies
Compare business insurance today
If you’re thinking of using a broker for your business insurance, it’s important to find one that is regulated by the FCA. You may also look to consider if they are registered with the British Insurance Brokers’ Association (BIBA), the insurance broking industry’s representative body.
You can browse the BIBA register to find an authorised and regulated broker who is signed up to BIBA’s practices and procedures.
Alternatively, you could compare business insurance quotes with NerdWallet today.
» COMPARE: Business insurance
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