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(i) Less Direct With a broker, you or your business does not deal directly with the insurance company. This means that the broker needs to be made fully aware of all important information about your business and the insurance you require. Otherwise, it will be difficult for them to arrange an appropriate quote, and delays may occur while the broker gets the relevant information from you. There may also be slight delays when it comes to renewing insurance or changing details, as the changes will have to go through the broker. (ii) Risk of Bias As brokers are usually paid commission by the insurance company, there is a risk that a broker will be biased and not actually provide you with the best quote or cover for your cost. While the vast majority of brokers will genuinely search to get you a good and appropriate deal, there is a small minority that will only look for the best quote for them. To combat this, The British Insurance Brokers Association (www.biba.org.uk) is a body that helps regulate brokers, keeping standards high and preventing dishonesty. Combined Insurance Although there are numerous different types of insurance, many insurers offer a combined "Commercial Insurance" policy which covers the most important areas for businesses in one agreement. A typical Commercial Insurance policy covers Buildings Insurance, Contents Insurance, Stock Insurance, Public Liability Insurance, and Employers Liability Insurance. Other areas that are sometimes covered (or offered as optional extras) include Product Liability Insurance, Professional Indemnity Insurance, and Goods in Transit Insurance. The exact details of the cover will of course vary depending on the nature of the business to be insured, and the cost of the policy. Just because two policies cost the same, does not mean they cover the same. You should always get professional advice or have your broker look through the fine details before buying any policy. A broker can advise you on whether such a policy is correct and necessary (E.g.: Small office and home office businesses may need a different policy), and will be able to make sure that the fine print of the combined policy does not miss or limit important areas of cover. Increasing / Decreasing Your Cover Many insurance policies allow you to adjust details such as the amount of cover by increasing or decreasing the cost of the policy accordingly. E.g.: 1. Public Liability Insurance cover can sometimes be raised from £1million to £2million by increasing the cost of the policy by a set amount/percentage. 2. With some policies, increasing the Excess (The amount you pay towards each claim made) from £250 to £500 you will get a set amount/percentage discount to the policy cost. However, in the event of a claim, you will always have to pay the extra amount. These adjustments can save you a lot of money on the cost of the policy, but you should always consult your broker (or get professional advice) before changing the details of your cover. Any bad judgement could leave you with too little cover, and create huge expenses in the event of a claim. Home Office Insurance
A home office environment will need a specific Home Office insurance policy to make sure that all your business equipment is properly covered. However, some insurers do offer a combined home and business policy, which allows you to cover both your personal and business items under one agreement. You should always seek professional advice, or arrange for a broker to help arrange a Home Office policy if you have any doubts at all about what is or is not covered. Key Points It can appear very simple to take out business insurance; and in some cases it is. However, there are so many different types of insurance and so many critical factors that affect the cost and effectiveness of your policies; that it usually makes good business sense to use a broker to search on your behalf. A broker can make sure that all important areas are covered, and will usually be able to find you cover at a lower cost than if you bought direct from the insurer. Perhaps more importantly, a broker will be there as a source of advice and help when things do go wrong. They can help put forward your case and ensure the best possible results when you do have to claim. Combined "Commercial Insurance" provides cover for all the most important areas of business insurance, but you should be sure that the cover is of the same quality before buying. Some policies allow you to raise or decrease cover in order to affect the cost of the policy. This can save money on the policy cost, but should never be done without professional advice. If you work in a home office, you need a specific Home Office policy. Although this is sometimes available combined with your standard Home Insurance or Commercial Insurance policy. Although using a broker means you are not in direct control of your insurance buying, they provide good quality advice. They also help ensure you get the appropriate level of cover at the lowest cost possible. If
you wish to keep direct control of your insurance buying, make sure
you check all policy details in full, and ensure you have the right
cover before agreeing to payment. Be extra careful if you are buying
online;
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If
you work from a home office, then it is important to remember that your
home insurance policy does not cover your business items, and neither
does a standard Small Office Insurance policy.