Dangers of going direct (part one)
I would be amazed if anyone reading this post has not experienced buying insurance direct, whether it is for home, car, or a trip overseas, going direct can be the best course of action.
Filling a few fields on a computer screen, using price comparison sites, or answering questions over the phone can be easy with good results.
However, it is not always the best thing to do, as there are risks involved, particularly when considering commercial insurance.
Below, I’ve detailed a few simple examples to illustrate this:
Could have been fined £2,500 a day
A few years back I remember reviewing a commercial combined insurance policy for a prospect. Initially bootstrapping the business, they bought a policy direct through an online platform. The company did fantastically well and grew quickly, winning bigger and better contracts.
Without the advice of a broker, they began employing staff unaware they were required by law to purchase Employers Liability insurance. They didn’t know this could have resulted in a fine of up to £2,500 for every day cover was not in place – they had no idea.
Fortunately, this problem was rectified swiftly and easily. We were able to obtain a policy with the same insurer to include the required Employers Liability, and therefore improve cover.
Direct insurance premiums are lower, right?
No, that’s simply not the case. Frequently the premium level is lower when using a broker.
In the example discussed above, you may wonder how much extra premium was charged to include Employers Liability? The answer is none.
Premiums vary, and so do the attitudes of different insurers. A competent broker will be aware which insurers will be interested in your business, and which ones are likely to quote competitively.
Cheapest premiums are always the best
Is a bicycle the same as a car? Both can get you from A to B, but there is a difference in your journey, and their cost.
Not all policies are alike, not all insurers provide the same service. Buying an insurance policy should never be like ticking a box – it should be like buying a suit.
Select something that fits you, has the impact you intend, for a price that you can afford.
What would a publisher’s professional indemnity policy without defamation look like? Probably considerably cheaper but almost certainly not fit for purpose.
A brand you trust gives comfort, and above all, a tailor’s expert input can make all the difference. Your broker is your tailor, and a strong reliable insurer is your brand, as it is the quality of the insurer that denotes the adequacy of your product.
Who has your back?
Where insurance is purchased directly you don’t have the benefit of someone on your side, advising what rights you have, or what the best response. With a broker you do.
This is never more important than when something unfortunate happens and you have a claim.
Having someone with experience; able to navigate insurer questions, prepare accurate information, protect your rights and interests, can be worth several times the premium paid. This is never more so than in a situation that can feel confrontational and highly stressful.
Part two to follow