Your Business Deserves Better Than Direct Insurance

In the UK commercial insurance landscape, businesses often turn to direct providers, lured by promises of simplicity, convenience, and competitive pricing.

But beneath the surface lies a harsh reality: direct insurers often fail to properly advise the businesses they serve. At RiskBox, we’ve seen firsthand the pitfalls of this approach – and the risks it poses to businesses across the UK.

A conflict of interest

Direct insurance providers operate under a fundamental conflict of interest. They sell their own products, meaning any advice is inherently biased. They can’t, and therefore won’t, recommend better terms, more comprehensive cover, or cheaper premiums from alternative insurers — even when it’s in the best interest of the client. For businesses relying on these providers for guidance, this creates a dangerous blind spot.

Insurance is complex. It’s not just about ticking a box or finding the cheapest premium – it’s about understanding the nuances of cover, compliance, and risk management. Without impartial advice, businesses are left to navigate these complexities alone, often leaving them overpaying for restrictive policies or, worse, inadequately covered should a claim arise.

Restrictive terms and eye-watering premiums

One of the biggest issues we encounter at RiskBox is the restrictive terms commonly offered by direct insurers.

Let’s take Professional Indemnity Insurance as an example. Household name direct providers typically quote on aggregated limits as standard for clients – they do this to direct customers while automatically quoting on “any one claim” limits when going through a broker. The price is rarely any different, so how is this fair to the direct customer? And with negotiations happening in a silo, how is the insured to know that they’re being led down the garden path?

Even more alarming are the inflated premiums we often encounter. Direct providers rarely seem to reward loyalty with static premiums, or even reductions. Instead they use stealth

to incrementally increase the premiums year on year, adding costs on for even simple changes. So while a small agency may have had a decent competitive premium when they set up, they could be paying thousands more than they should several years down the line.

We see this a lot at RiskBox. The reality is that without an independent broker to explore the full market, businesses will never know what better options might be out there.

A dangerous lack of checks

Perhaps the most concerning issue is the lax approach many direct insurers take to compliance.

For example, UK law mandates Employers’ Liability (EL) Insurance for most businesses with employees or limited companies that have multiple directors. Yet once again, this month we saw a direct provider allow a business to trade for years without it.

This is not a minor oversight. Without EL Insurance, businesses risk hefty fines, legal action, and reputational damage. Worse still, if an incident occurs without the correct cover in place, the financial consequences could be devastating.

The direct market’s failure to verify requirements, such as simply cross-checking Companies House for multiple directors, or implementing systems to block non-compliant policies, is reckless in our opinion. It leaves businesses exposed and undermines the very purpose of commercial insurance: to protect.

RiskBox are changing things

Businesses deserve more than a one-size-fits-all approach to their insurance needs. They deserve independent, impartial advice from experts who take the time to understand their risks, ensure compliance, and secure the best possible coverage at the right price.

At RiskBox, we believe in putting our clients’ needs first. We explore the entire market, tailoring solutions that genuinely protect businesses and ensuring compliance with UK legislation. Most importantly, we’re not tied to a single insurer, meaning our advice is truly impartial.

If you’re tired of overpaying for restrictive policies or worried your business might be exposed, get in touch. Because you deserve an insurance partner that has your back.

Photo by Adeolu Eletu on Unsplash