Guide to Working with a Business Insurance Broker
A business can change quickly. You might start out working from home with a laptop and a handful of clients, then find yourself leasing premises, employing staff, buying vehicles, holding stock or taking on larger contracts. As the business grows, so does the range of things that could potentially go wrong.
That is where business insurance comes in. But finding the right cover is not always as straightforward as buying a policy online and hoping it covers everything. Different businesses face different risks, and choosing the right combination of policies, limits, and extensions can be difficult if insurance isn’t your area of expertise.
This is one reason many business owners choose to work with a business insurance broker.
What should you tell your business insurance broker?
The more accurately your broker understands your business, the better positioned they are to help you find suitable cover.
Be prepared to discuss things such as:
- What your business does and what services or products you provide
- Where you work and whether you have business premises
- How many people you employ
- Your annual turnover and projected turnover
- The value of equipment, stock and other business assets
- Whether you own or use commercial vehicles
- Where your customers are located
- Whether you work on other people’s premises
- Any contracts requiring specific insurance limits
- Previous claims or incidents
- Any changes planned for the coming year
It is also important to be open about material information. Business insurance relies on insurers having an accurate picture of the risk. Guidance available through Weir Insurance’s SME claims resources highlights the importance of presenting the risk fairly and disclosing relevant material information.
What does a business insurance broker actually do?
An insurance broker acts as an intermediary between you and insurance providers. Rather than expecting you to work out exactly what you need and then search through policies yourself, a broker can take the time to understand how your business operates, identify the risks you need to consider and help you find appropriate insurance.
For a business owner, that can make the process considerably less daunting.
A broker may ask questions about your premises, employees, vehicles, customers, suppliers, contracts, equipment, stock and the type of work you carry out. These details matter because two businesses that look similar on paper can have very different insurance requirements.
For example, a small retailer, an electrical contractor and an accountancy practice might all be small businesses, but the risks they face are not the same. One may be particularly concerned about stock and premises, another about tools and liability while working at customers’ properties. At the same time, the professional services firm may need protection against claims arising from its advice.
A good broker connects those risks with the right types of insurance.
Understanding the different types of business insurance
One of the biggest advantages of speaking to a broker is being able to look at business insurance as a whole rather than as a collection of confusing policy names.
The range of cover available can be extensive. Weir Insurance’s product library, for example, includes SME, corporate and specialist insurance products ranging from Public Liability and Employers’ Liability to Professional Indemnity, Commercial Combined, Commercial Fleet, Goods in Transit, Contractors All Risks, Cyber Liability and Directors & Officers insurance. It also lists specialist covers for farms, care homes, clinics, salons, nurseries, charities, and catering businesses.
Here are some common types of business insurance you may come across.
Public Liability Insurance
Public Liability insurance covers claims made by members of the public who suffer injury or damage to their property in connection with your business.
Imagine a customer visits your premises and slips on a wet floor, or one of your employees accidentally damages something while working at a client’s property. Depending on the circumstances, you could face compensation claims and associated legal costs.
The right level of cover will depend on your business and its contractual requirements. A broker can help you determine the appropriate limit of indemnity.
Employers’ Liability Insurance
If you employ people, Employers’ Liability insurance is particularly important. In the UK, employers are generally legally required to have Employers’ Liability cover, subject to certain exemptions. Weir Insurance similarly highlights Employers’ Liability as a legal requirement for businesses employing staff.
It is worth remembering that “employees” can encompass more situations than a full-time permanent workforce. Casual and temporary workers can also be relevant when considering your responsibilities.
Professional Indemnity Insurance
Professional Indemnity is particularly relevant to businesses that provide advice, professional services or consultancy.
A client could claim that your advice, work or professional service caused them a financial loss. Professional Indemnity insurance can provide cover for certain claims of this nature, subject to the policy terms.
For some professions, appropriate professional indemnity insurance may also be a regulatory or contractual requirement.
Product Liability Insurance
If your business manufactures, supplies or sells products, Product Liability insurance may be worth considering.
A product that causes injury or property damage could potentially result in a claim. This is an area where understanding your supply chain and exactly what your business does is important when arranging cover.
Commercial Combined Insurance
For some businesses, several different areas of cover can be brought together under a commercial combined policy.
Depending on the business and insurer, this could include buildings and contents, liability insurance, business interruption, and other relevant cover. Hospitality businesses, for example, can have particularly varied requirements, from stock and refrigeration to guest-related liabilities and loss of licence.
A broker can help determine which sections are relevant, rather than assuming a standard package is suitable.
What about specialist business insurance?
Not every business fits neatly into a standard category.
This is another area where a broker can be useful. Weir Insurance’s product library includes specialist products for businesses such as farms, care and nursing homes, clinics and surgeries, salons and beauty businesses, stallholders, places of worship, renewable energy businesses, taxi operators, caterers, charities and nurseries and crèches.
Specialist insurance exists for a simple reason: the risks can be very specific.
A beauty salon has different exposures from a farm. A nursery has different responsibilities from a commercial property owner. A catering business may have concerns around food, equipment, premises and public liability that would not apply to an office-based consultancy.
Trying to fit every business into the same insurance template doesn’t always make sense.
Why use a broker instead of buying insurance yourself?
There is nothing particularly difficult about obtaining an insurance quote online. The challenge is knowing whether you are asking for the right thing.
It is easy to focus on the price of a policy while overlooking details that could matter when you need to make a claim.
A broker can provide a second set of eyes. They can discuss what your business actually does, explain different options and help you understand what a policy does and does not cover.
Independent brokers can also have relationships with multiple insurers. Weir Insurance, for example, says it has established relationships with dozens of insurers and uses these relationships to develop tailored solutions for clients.
That can help when your business doesn’t fit neatly into an off-the-shelf insurance product.
It also means the conversation does not have to begin with, “Which policy do I buy?” It can begin with, “Here is what my business does. What risks should I be thinking about?”
That is often a much more useful starting point.
A broker can also help when your business changes
Insurance should not be something you arrange once and then forget about.
Businesses evolve. You might take on another employee, move premises, purchase a company vehicle, start importing goods, begin working on larger contracts or introduce a new service.
Any of these changes could affect your insurance requirements.
This is particularly relevant at renewal. Rather than automatically renewing the same cover every year, it can be worthwhile reviewing whether the policy still reflects the business you are running today.
Weir Insurance recommends reviewing business insurance at renewal and says it can assess an existing renewal schedule and look for alternative quotations.
Even if you have been insured for years, your business today may look very different from the business you were running when the original policy was arranged.
Don’t focus only on the premium.
Price naturally matters to every business. Insurance is a cost, and keeping operating expenses under control is important.
However, the cheapest policy isn’t necessarily the most appropriate.
A lower premium could reflect a different level of cover, a higher excess, lower limits, additional exclusions or other differences in the policy wording. That doesn’t automatically make a cheaper policy bad, but it does mean comparing insurance solely by price can be misleading.
The key question is whether the cover fits the risks your business actually faces.
This is where having someone explain the differences between quotations can be particularly helpful.
Finding the right business insurance doesn’t have to be complicated
Business insurance can initially seem like a maze of different products, exclusions, limits and terminology. But you do not necessarily need to become an insurance expert to make an informed decision.
A business insurance broker can help you take a step back and look at the bigger picture: what does your business do, what could realistically go wrong, and what financial consequences would those problems have?
From there, the conversation can move towards the types of cover that may be appropriate, whether that is Public Liability, Employers’ Liability, Professional Indemnity, Product Liability, Commercial Combined, Business Interruption, Commercial Fleet, Cyber Liability or a more specialist form of insurance.
The most important thing is that the policy reflects the business you actually run — not the business you had several years ago, or a generic version of your industry.
For business owners, that can make using a broker about much more than simply finding a quotation. It can mean having someone who understands the risks, helps you compare your options, and stays available as those risks change.
When it comes to business insurance, the goal should not simply be to find a policy. It should be to understand what you are buying and why.
For more information on the range of business insurance products available, you can explore Weir Insurance’s Product Library