The term Insurance broker and insurance adviser are really one and the same. “Insurance Broker” is probably more commonly used but “Insurance Adviser” is more representative the activities involved. There is a common misconception that an insurance broker is one who represents their client to source from the market the cheapest price for an insurance product. But an insurance broker’s responsibility really involves so much more. And since providing sound advice is the underlying responsibility, the term “Insurance Adviser” is now becoming more common.
Most business owners see insurance as an important tool for protection but too often it is treated as a commodity, with the view taken that all policies are the same. This attitude naturally then leads to purchasing solely on the best price available. But policies are not all the same and often need to be tailored to a business’s specific needs so that they can provide adequate protection.
Unfortunately, there are insurance brokers who will sell on price alone in order to win your business. Although this offer can be tempting, naturally it is something to be aware of. I occasionally see cases where brokers have provided their clients with cheaper insurance pricing without offering any real insurance assessment or risk advice. The result can be underinsurance or a gap or total exclusion of cover. And tragically, this may only become apparent after a claim incident or when catastrophe strikes.
If you really want to get the right service from an Insurance Broker / “Insurance Adviser”, you should find someone who is prepared to:
- Take the time to understand your business, its exposures, and your insurance needs. With this, they can then suggest a solution that meets your requirements and budget. Remember, the better your insurance adviser understands your business the better the advice and service they should be able to provide you.
- Not just provide the best insurance price, but also provide advice and guidance with respect to insurance products, the cover they provide as well as their limits, gaps and exclusions.
- Assist with providing and co-ordinating risk management advice. This could be as simple as general fire protection and hazard advice or a more complicated risk survey report.
- Be available to answer your questions. A good insurance adviser will be there for you to provide service and advice all year round. Not just when you are renewing your policy.
- Review your contracts and let you know if in their view, your insurance will respond appropriately. And recommend legal assistance for where more complicated contracts are involved.
- Represent you at claim time to ensure your policy responds for you the best it can and that the insurers involved meet their obligations in full. When required, insurance advisers will also involve and co-ordinate the necessary professionals. Loss management companies for example are sometimes required to prepare a recovery plan and assist with quantify the loss to the insurance company involved.
Of course, price is important and by no means should any business pay more for their insurance than necessary. But you should also carefully consider the value you place on properly protecting your business assets and legal liability. Being dictated by price alone can result in the wrong type of cover and have the same ramifications as not taking out any insurance at all!