Navigating your way to find the perfect broker

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By Tim Weymouth, Associate Director, ACII, AIoL

Insurance can often be a complex subject and, in my discussions with clients, I will try to use a different context to explain my point. I am not alone in this. The Office of National Statistics do this to help explain consumer price inflation with their basket of goods ^[1].

Insurance broking is a professional service which is advice led and should, therefore, be expected to provide clear and accurate information – would you be willing to accept the following from other professional services?

• A doctor who decides not to mention an anomaly in your blood test for fear it may concern you.
• An accountant who doesn’t want to tell you of the need to pay more tax as your business has grown, so puts the same figures year on year in your tax return creating a misrepresentation to HMRC.
• An IT consultant that doesn’t offer to change your software to a different package because you have always used products supplied by XYZ software firm, even though ABC is now the clear market leader.

I expect your answer to all the above is no – and quite rightly so. But these are things that businesses will accept from their insurance broker. Brokers are not talking to their clients about the need to have accurate reinstatement costs on their buildings policy, an ‘oversight’ which can lead to at best an inadequate payout for loss, or worse, no payout at all as the policy becomes invalid due to reckless misrepresentation by the insured.

Some will roll over the financial information from year to year for wageroll, turnover, and Insurable gross profit, creating under-insurance on the Business interruption cover and non-disclosure on the liability sections.

Other brokers may have talked about cyber in 2019 when the client wasn’t interested, so feel no need to raise it again now, despite the ransomware pandemic and increased risks presented by hybrid working.

When I look to advise clients, I see my role as a challenging friend. I am going to ask you to think about things which may at times be uncomfortable or that you feel might not apply to you. Of course, avoiding such awkward or contentious conversations would make for an easy life, but they come from a position of care where, if the worst happens, then I want your business to have the best possible insurance protection in place to help it recover.

I had a detailed discussion last week with a client about their Cyber risk. Ultimately, they may still choose to self-insure their cyber risk (which is against my advice) but my client contact commented after our twenty-minute debate, “You are the type of broker I want. Not one that ticks the box when I say no, but one who pushes me to think about it from every angle so I can make an informed choice”.

Think about your recent insurance conversations with your broker. Do they challenge you or  simply execute what you tell them to? Insurance broking is at is best when it is advice led. Companies should engage insurance brokers for their advice first and foremost, not simply as a means to access insurance products.

Our brokers will help you find the insurance programme most suited to your business needs. 

[1] https://www.ons.gov.uk/economy/inflationandpriceindices/articles/ukconsumerpriceinflationbasketofgoodsandservices/2022