At a glance
Buying cheaper off-the-shelf insurance solutions either direct from carriers or via aggregator sites may not provide small businesses with adequate protection for their individual needs
As SMEs are becoming more complex, using brokers may help fulfil their insurance requirements
Brokers may also plug gaps in cover for small businesses, as well as provide expert risk advice
With SMEs increasingly tempted to shop online for their insurance needs in a bid to cut costs, small businesses need to be aware that cheap off-the-shelf insurance solutions can sometimes fail to provide adequate protection.
So, if you are contemplating sourcing insurance direct from a insurer or via an aggregator site here are five reasons why small businesses should consider an broker when it comes to all things insurance.
1. Access to more products
Brokers tend to have access to more products than a customer could find direct. In commercial lines, the vast majority of business is traded by a broker and the direct market is not anywhere near as well defined. Using a broker provides choice of cover and price that may not be available elsewhere.
2. Not just plain vanilla
Most SMEs are extremely busy, so scouring the market to find the best deal won’t be the best use of their time. They should be concentrating on attracting new customers and servicing their existing ones. They tend to be small outfits and most won’t have a risk officer to research and evaluate insurance options. This is where a broker may be able to assist.
3. Experts on risk
The pace of change in all areas of our lives is increasing. One example of this is changes in technology, which can provide savings in costs or access to new markets. However, there may be additional risks that the SME needs to consider and a broker may be able to help with this.
One example of this is that more and more businesses use the internet to trade, but product liability in respect of exports to the US may be excluded. Another example might be around office-based risk and the increasing use of allowing staff to bring their own device to work. There are potential data security issues here, which, again, a broker may be able to help an SME evaluate and source suitable cover.
4. Plugging gaps in cover
The recession forced many British SMEs to diversify in order to survive. This in itself has led to them being more complex and having more complex insurance needs, such as exploiting new technologies.
Examples of this are a plumber including solar panel installation or florists adding jewellery or other gifts to the goods they sell. Newsagents, too, are increasingly becoming depots for parcel collection and returns, and Zurich has even had a barber’s shop located by the coast selling buckets and spades.
5. Dealing with legal complexities
More flexibility in working practices in a bid to achieve a better work-life balance may mean that more help is needed from a broker to better evaluate the risks. Examples include an increase in employees working from home, where health and safety implications may arise, as well as data security/cyber crime issues associated with remote working.