All businesses should have at least one type of insurance covering their business. Almost every aspect of your business can be covered against financial, equipment, or skill loss.

There are many different types of business insurance, and several different ways to purchase them. One of the most common ways of buying insurance is to use a broker to look for a deal on your behalf. However, before you start looking for an insurer or broker; here is a look at some key information on taking out a business insurance policy.

Buying Insurance Online or Offline

Over recent years, many insurance companies have started offering quotes and policies online. If you decide to look for insurance yourself, and without the aid of a broker, there are three different ways you can use the internet as part of the buying process:

(i) All Online

This is where all the details, quotes and payments are carried out online. You fill in a form, and a quote is given to you which you can then pay for online (Although some insurers take payment information over telephone or email).

(ii) Quote Online, Buy Offline

This is where the initial quotation form is filled in online, and the rest of the policy information and purchasing is carried out offline (Normally over the phone).

(iii) All Offline

This is where no actual quotation or sale takes place online. All the sale is carried out offline either face to face, by phone, or (rarely) by email. The website is just for information and reference, and plays no part in the actual buying of the policy.

Advantages of Online Quotes

(i) Time Saving

Arranging a quote online is usually much quicker than arranging one offline. Simply fill in the form and it will go straight to the insurer or broker, who can then deal with your enquiry and reply to you at the appropriate time.

(ii) Convenient

The process of arranging a quote online is usually much more convenient than through offline methods. There is no need to leave the office for a personal visit or take part in a lengthy phone call. You simply fill in the form, and are emailed or called back when a quote is ready.

(iii) Cheaper

Purchasing insurance online is often cheaper than offline. Many insurance companies will offer discounts (typically 5% of the offline price) to online policies. This is because an online quote saves them money on overheads (E.g.: Employee costs, phone call costs), which they can then pass back to you.

Disadvantages of Online Quotes

(i) Less Detail

The main disadvantage of online quotes and insurance is that because standard forms are used, there is a possibility that important information could be missed out. This could mean key areas of cover are missed, or that important details are not considered as part of the policy. This is much more of a risk with 'all online' insurers.

E.g.: If you apply for Employers Liability insurance, a standard online form may not have space to take into account the money your business has spent to reduce risks; which should lower the premium.

However, good insurers should check all information over email or phone before finalising policy details; allowing changes to be made from the basic quote to cover important factors. There is usually little point in getting a 'ready made' policy which may miss out crucial relevant areas of your business and insurance needs.

Should You Use a Broker?

Using a broker means that your insurance is sourced by a third-party. The broker will contact relevant insurers on your behalf to find you the best quote.

It is important to use a commercial/business broker (not a personal insurance broker), as they will have specific business experience that will bring you better results. It helps significantly if the broker has direct experience in helping insure businesses of your size and type, as they will already have a head start in finding you an effective policy.

Many brokers use online application/quote forms in the same way as insurers; although because the brokers do not sell the policy directly, the actual details and payment are almost always made over the phone or face to face.

There are several advantages to using a broker:

Advantages -

(i) Knowledge

Good brokers will have detailed knowledge of insurance and how to source the cheapest and most appropriate deals for their clients. They will be able to look at your business and recommend the level of cover you need in each appropriate area; and ensure that when you take out a policy it gives you the best (and most relevant) cover available for the cost.

They can advise you whether you need any additional, more specialist cover, such as Credit Insurance or Marine Insurance.

A broker can also provide you with invaluable advice and help in the event that you have to make a claim on the insurance, allowing you to achieve a satisfactory claim as quickly and trouble-free as possible.

(ii) Experience

As a good broker will be experienced with the fine details of insurance policies, they will be far better at looking through individual policy information and clauses (E.g.: The amount of excess payable) to check for any unwanted or missing areas. They can then deal with the insurance company and ensure you get a fair, effective insurance policy that covers everything your business needs.

(iii) Cost

As a broker deals with insurance companies on a regular basis, they are aware of the standard costs, and will know when a quote is overpriced. Not only that, but because a broker will purchase a large number of policies over a period of time, they are often able to get bulk discounts from the insurers.

This means that even with the cost of the brokers charges (which are sometimes covered by their commission from the insurer), buying insurance through a broker is normally cheaper.

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