Why you need an insurance broker for your business.
Whether you have recently gone into business on your own or you have managed your business insurances yourself for the last few years than read on below to see why you need an Insurance Broker and how they can help your business stay protected.
First things first, did you know that as an Insurance Broker roughly 20 percent of our clients approach us after suffering a significant loss. A loss that is usually large enough for them to worry about it happening again. With the increase in multiple comparison sites becoming available has led to many business owners managing their insurances under a ‘no advice’ model which we will go into further below.
Tailored advice to your business
As a business owner there are so many things that you need to be across; revenue, stock purchasing, tax lodgements, staff, customer enquiries plus millions of other things that keep you awake at night. Where does your insurance fit into this list? Do you have the time to understand exactly what cover you need or atleast enough information at hand to make a decision whether you want to pay for the cover or not?
Most insurance discussions with an insurance broker are wrapped up in an hour plus some emails back and forth. During this discussion we dedicate our advice specifically to your situation, your indsutry and what trends we are seeing the market. When you manage your insurances yourself, this is an extremely vital component that you are missing out on. As the old saying goes “you don’t know what you don’t know” and this is where in unfortunate circumstances something happens which is usually you needing to make an insurance claim and realising that there is no cover under the policy that you have purchased to cover this type of claim.
We use industry tools that can easily summarise what your biggest risk exposures are based off your industry and your location. This gathers historical data to outline claim costs and claim frequency which determines how likely it is you will need to make a claim and under what type of policy.
For example, here is a risk rating for a plumbing contractor:
Stronger Policy Wordings and Coverage
When you purchase products from the likes of Bunnings compared to a rural hardware store why is there such a big difference in the price? It usually comes down to purchasing power, the same thing applies with insurance. Most Insurance Brokers are usually apart of a Broking Group, our Broking Group is Steadfast. Steadfast has negotiated policy wordings that are exclusive to Steadfast Brokers in other words, you cannot get this type of coverage unless you use a Steadfast Broker. When you purchase a product directly from an insurer, you are getting the policy that they put together and the policy that is designed to reduce their risk enough that they can still maximise their profits.
This is not the case with a Steadfast branded policy wording, due to our strength in the market insurers go through a thorough Vetting process which requires them to meet and uphold a service standard to continue having access to our placement systems. This is regularly audited and updated to the Broking Group during our 6 monthly town hall meetings.
Saving You Time and Money
A lot of people use this as their sole answer to why you need an insurance broker as time and money can make a significant impact to your business if not balanced correctly. What we typically see happening when business owners manage their own insurances is that they spend a considerable amount of time setting up their first insurance policy when they start trading and then this tapers off every year to less and less. During this time their business has usually grown, changed directions, employed staff and many other risk factors become present that they didnt have time to get into as they occured. The renewal notice then comes around, its forwarded to your accounts person and asked to be paid then filed away for another year.
Can you start to see why you need an Insurance Broker now? Let me paint a picture of what it’s typically like having a Broker work for you. We contact you 4-6 weeks out from your renewal date, we either meet with you in person, arranging a 30 minute phone call or send you an email just to confirm some details with you. After this, we then go away and leave you to managing your business while we communicate on your behalf with our insurers. At minimum, we usually get quotes of 10 different insurers and strategise on how best to structure your insurance for the best outcome.
Once we have all our quotes to hand and have a recommendation we will usually circle back to you and depending on how you like to interact we will either meet with you, call you or send an email with a summary. This is where we present to you our findings and give you our recommendation on how you should proceed. We will also give you a summarise version of additional covers that you may wish to consider. This is a requirement of our compliance guidelines, it is up to us to present to you the types of covers that you may require.
On average, most clients that spend between $10,000 – $20,000 per year on their insurances can have their insurances managed for less than 1 hour of their time. 1 hour and you know how you’re covered, why you’re covered and when you’re covered and you didnt need to listen to hold music.
Part of our service to you as a client is to support you if ever you needed to make a claim. This starts from the initial notification of something happening. We have a strong understanding of the policies that we sell and how they cover you. If you call me and tell me that your home has caught fire and you dont know what to do? I immediately know that your policy covers you for accomodation so there has been many times where I have told a client to pack a bag, go and pay for a hotel and send me the receipt. I have also seen many situations where a catastrophe occurs like a hail storm and hotels book out extremely quickly as people realise this is what they need to do and you’re left being sent to a hotel 20kms away from your home. Having that advice and acting quickly can be a real convenience in these situations.
In larger claim situations there can be multiple back and forths that you aren’t aware of because you’ve never been in this situation before however, a claim that costs more than $10,000 could take countless hours of phone calls, emails, quotes, reports and meeting with an assessor. All of which require your time and attention – wouldn’t it be nice to have someone that could manage this for you and give you simple updates along the way? Is this why you need an Insurance Broker in your business?
If something does go wrong than another great reason as to why you need an insurance broker is that you have escelation points available to you should something not go to plan.
Most claim related issues are usually caused by interpretation and emotional clashes between a claims handler and the insured party. If something was to occur, we are already usually managing your claim for you and providing updates along the way. If we notice that an insurer is taking too long or they have made an incorrect claim decision than we have multiple escalation points available to us. Whether this be a simple email to a Relationship Manager asking for assistance or sending a complaint through to our Broking Group for support on a large loss claim the issue can usually be solved quite quickly if and when the right people get involved. If you’re managing this yourself than I can immediately tell you that any complaint being lodged internally can take you upwards of 10 days. Imagine that, waiting 10 days whilst your business is unable to trade to get someone to review your complaint? What does that cost your business?
We work for you, not the insurer
Many clients seem to think that as an Insurance Broker you act on behalf of the insurer, this is not correct. We act on behalf of our client as an intermediary between an insurance contract. In essence, we recommend placement of specific policies dependent on the current needs of our client and we ensure that the cover arrangements that have been agreed upon are upheld by both parties. As insurance experts we act as your voice to the insurer by declaring the information requested by the insurer when quoting on a policy to providing supporting evidence of a claim.
Have we answered your question of why you need an Insurance Broker?
If you have any other questions that you would like answered with regards to why you need an insurance broker to be apart of your business than we would be more than happy to provide you with further information. We offer a completely free initial review process where we can discuss potential risk factors to your business, review your current cover and also obtain comparison quotes. Contact us today.