If you are looking around for a business or commercial insurance quote, you have, thanks to the internet and computers, a vast array of choices. Gone are the days when your only chance of getting a quote was to make an appointment either to go and see or to have a broker visit you.
Brokers are still the preferred route to go in most cases because of positive government intervention. On the 15th January 2005, it became illegal for an insurance broker to trade or provide advice without being either directly or indirectly authorised and regulated by the Financial Services Authority. Of course, as with most aspects of big government this has gone to far and there are so many rules and the fees are so high that brokers are starting to complain.
However, the original 2005 idea still stands true in 2010. A broker has to provide professional advice to anyone that contacts them for a quote. They can, if they wish, charge a fee for this service. But, in reality, all brokers will be quite happy to speak to you, either in person or over the phone, to decide on your needs and wants and arrange a quote accordingly.
There are, as mentioned earlier, alternatives to speaking to a broker. This is where things can become difficult. Everyone has got used, over the years, to meerkats and red cars telling us to phone them or go on the net to get a quote. For car, travel and house insurance, this is the right place to go. The quote process is simple and you have the option of picking and choosing your levels of excess and extensions.
But, as far as small business insurance is concerned, is this a realistic option to be considered or not? Whilst it is not as complex as commercial liability insurance, it is still a product that you, the business owner, should discuss with a broker. Speaking to more than one broker is an absolute must. The reasons for this are that certain commercial insurance companies do not feel, administratively, that it is cost effective to sell small business insurance. So, they set their minimum premium levels at GBP 500 or GBP 1,000. If you get a quote from one of these companies, it may be put to you as the most competitive, but if you shop around you can probably get this cheaper.
You should also understand the difference between a broker, an appointed representative and a direct insurer. A broker must be able to obtain a range of quotes for you from different insurers or underwriters. An appointed representative, or A.R., is not independent. They only provide quotes from a selected, sometimes just one, group of insurers. A direct insurer is just that, it is one insurance company selling its own products.
The analogy to use is buying a used car. If you are not after a particular model or brand, but you know you want four doors and a boot, then you go to a used dealer that sells different makes and models. You then make your choice based on the variety on offer. Small business insurance is exactly the same. You may come across a website whose strap line is that they will compare business insurance for you. However, they are only comparing their specific range of products, which could have high excesses, onerous terms or small print that will stop a claim being paid, as a worst case scenario. The problem is, who is there to advise you whether to take out the GBP 600, the GBP 625 or the GBP 700 quote?
A broker will do this for you, and in the extremely unlikely event of them being wrong in years to come, you can claim against them for negligent advice, if this is the case. If you buy from a website, without speaking to anyone, caveat emptor (let the buyer beware) is never more true.