When purchasing insurance, the majority of commercial and mid to ultra-high net worth individuals will access insurance products via an insurance broker, as expert advice is required to ensure adequate cover. For some lower-value and simpler products, buyers will often approach the insurer directly.
It is common for people to believe that insurance policies bought directly from insurers will be cheaper than via a broker. This is often not the case. The cost of policies from direct insurers are often higher, as they are required to cover high advertising cost, while a broker has access to more competitive markets.
When buying insurance it is important to really understand what you are buying and ensure it is adequate to meet your needs, requirements and expectations. A key benefit of buying from a broker is that they can guide you to the most suitable product for you from a vast range of options. When buying directly from an insurer, they are unable to offer impartial or independent advice, and customers may end up with an ill-fitting product, from a narrow range, that does not exactly fit their needs.
A broker will also act as your advocate in the event of a claim. Brokers earn their commission from insurers for arranging policies on their behalf. They earn their fees based on the advice they provide to their clients and also for any administrative costs they incur. The broker is the buyer’s agent. In return for their fees and commission they act on the buyer’s behalf, assisting with claims, providing insurance and risk management advice, etc. A broker should add value to your organisation.
For a free consultation, please do get in touch with Talbot Jones Risk Solutions to discuss your insurance requirements and how we could help.
More information is available in our Buyers Guide, found on our website.