Insurance Brokers
Insurance brokers have traditionally been defined as agents who establish a suitable policy or contract for insurance cover on behalf of a client or business. In the United Kingdom, such brokers are regulated by the Financial Services Authority (FSA) and are organized by the British Insurance Brokers Association (BIBA). The role and identity of insurance brokers is in reality far more blurred than the text-book definition, however - brokers can act on behalf of individual insurance companies or can be free-agents that offer the best possible deals. There is no real legislation that governs how brokers defines themselves, however using the BIBA directory generally ensures that the broker you choose is of a suitably independent nature.
Information Required
When you hire the services of an insurance broker, they should first conduct a thorough examination of your business and the unique requirements of your customers and employees. This can involve carrying out an on-site visit to establish the scale and design of the premises, as well as to establish the number, age and experience of the employees and the duties they undertake. Be prepared to explain the nature of the business and its dealings with customers, clients and suppliers as this can make a big difference to the final policy that is produced.
It will also be necessary to tell the broker some basic financial statistics such as the annual turn-over (used for calculating insurance for loss of income, for instance), the values of the equipment being used (for insuring against damage or theft), and the wages of the employees (for insurance against loss of wages as a result of injury or death). With such information the broker can gain a clearer picture of the exact requirements of the business and can therefore make sure that the correct insurance premiums are paid.
Policy Search
Once the broker has established the value of the business and the underlying costs and profits, the broker will essentially shop around for the right policy on your behalf. This may involve speaking to several insurance companies and explaining the basic requirements of your business, or it may be as simple as finding a pre-designated package that fits specifically with your industry (as is the case with some printers, manufacturers and tradespeople). Once the best policy and deal has been found, the broker will provide you with the details and allow you to make the final decision on the purchase.
Benefits Of Hiring A Broker
Although insurance brokers will charge you a fee for their services (either a pre-agreed flat fee or a commission-based charge), there are several benefits for employing their expertise. Not only are they experienced in organizing comprehensive insurance policies for even the most detailed of businesses, but they should be up to date with industry trends and changes. This means that you are essentially guaranteed to get the best-fitting policy for your business rather than one that doesn't offer complete cover or is out of date.
Secondly, if they are truly independent they should be able to find you the best possible deal for your policy and they may even be able to play off rival insurers against one another to gain the upper hand. This can mean overall savings on your policy.