Insurance broker or direct?

Why Should You Work With An Insurance Broker?

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Why should you work with an insurance broker?

Finding the right insurance cover can be daunting for even the most experienced business owners.There are many intricacies that organisations must navigate, and the risk of underinsurance is an issue that requires careful consideration.

There are over 50 providers of insurance solutions in NZ, most with a multitude of policies available. With so many policy options and the financial security of their business at stake many small business owners choose to use an insurance broker.

We’ve assembled this white paper to help you understand what a broker does and if working with one is right for you.

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What do insurance brokers do?

Insurance brokers are professionals who work diligently to analyse the risks to your organisation, identify the best coverage for your needs and facilitate any future claims. Brokers are much more than just middlemen. An insurance broker works for you rather than an insurance company. The purpose of a broker is to maintain a complete understanding of all the insurance products that are available, provide you with all the information you need to make an informed decision and to advocate on your behalf every step of the way.

Whether you’re looking for general business insurance solutions or have special requirements, brokers have access to products and solutions that companies typically struggle to find independently.

One of my clients says he thinks of me as part of his team, he says I’m like another director who’s got their eye on the business.PHIL THOMPSON BRANCH MANAGER / SENIOR COMMERCIAL BROKER, ROTHBURY CENTRAL OTAGO

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1. Ease and speed of arranging cover

Recognising possible risks, researching the available insurance cover and finding policies that fit your unique requirements can be complex and time-consuming.

Enlisting the services of a broker means you can leave the task of researching your business’s insurance to an expert, while you focus your time and energy on what you do best - running and growing your firm.

2. Reassurance that you have the right cover

There are a multitude of risks that your business must address to avoid costly unforeseen circumstances. Property and stock damage, commercial vehicle losses, business interruption events and statutory liability are just some of the issues that organisations need to consider when selecting a comprehensive insurance solution.

The business environment keeps changing. New risks like cyber crime or law changes such as the Health & Safety at Work Act will have an impact on your business and insurance cover. Brokers are insurance professionals and are experts at understanding the risks to your business.

Working with a broker can provide additional security ensuring that the type and level of cover you have is right for your business and that you aren’t unintentionally at risk.

3. Industry expertise targeted at your company

This point relates directly to a broker’s insights into the insurance sector. Along with having an in-depth understanding of the industry as a whole, brokers also have knowledge of sector-specific risks and how policies respond to claims situations.

This expertise can then be applied to your business in order to ensure you have the right balance of policies and are well informed of what you are and are not covered for.

4. Claims help

A good broker will take care of your claim from beginning to end, managing the entire process and working as an advocate on your behalf.

With intimate knowledge of the how insurance operations work, a broker can ensure your claim is managed efficiently and quickly, with a better outcome than you would achieve on your own.

When I talked to a new client the other day, she said she’d spent half the night trying to figure out what liability insurances her café really needed. After all that she still wasn’t sure if she’d have cover for a complaint about food poisoning.MARK SLOMAN LEADER – BUSINESS DEVELOPMENT & SALES / COMMERCIAL BROKER, ROTHBURY WAIKATO

What are the benefits of working with an insurance broker?

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My client was really thankful for the information I sent him about the new health and safety laws and what they meant for his Statutory Liability insurance cover levels.KIM MATTHEWS, LEADER – BUSINESS DEVELOPMENT & SALES / COMMERCIAL BROKER, ROTHBURY HAWKES BAY

What are the risks of not using a broker?

1. Not having the right level of cover

Without a broker, your business will likely receive an off-the-shelf insurance product rather than one that is tailored to your specific needs. This could leave you with gaps in your coverage.

For example, you may have a material damage policy that covers you for flood damage to property, but you may fail to take out the right level of business interruption insurance to account for profit losses you suffer while carrying out repairs.

25% of NZ business do not reopen following a major loss event like a fire.

2. Lack of assistance when entering into a policy

A company’s duty of disclosure and similar policy requirements can be difficult to navigate without a broker’s advice.

Organisations must provide full and frank details of their business to allow insurers to set the terms and conditions of the policy. Failing to give the correct information could result in your insurer refusing to pay part or all of a claim, while some instances of non-disclosure may be considered fraud.

Your broker knows the types of evidence or proof you may be required to provide at claims time and will ensure you are covered appropriately.

3. No support when a policy ends or requires updating

Businesses change year to year and your insurance needs to be kept up to date to reflect this. For example higher stock levels, increased creditors or changing staff numbers all affect your business insurance.

When amendments are required or a policy is nearing expiration, brokers can reassess a business’s needs and negotiate new terms to ensure you maintain comprehensive coverage. While the risks are significant, brokers can help to offset them by offering dedicated advice for your business.

However, there’s one final issue that highlights the importance of working with a broker - the difficulties that can arise when making a claim.

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How can a broker assist during the claims process?

27% of businesses said claims are resolved faster with a broker.

A broker’s job doesn’t end when they provide you with an insurance solution. Once an insured event does occur, brokers provide additional assistance, managing the claims process on behalf of businesses and providing a point of contact at every stage.These benefits were underscored by research from Vero. The company found that 30 per cent of policyholders stated that using a broker resolved a claim with less hassle than working directly with the insurer. A further 27 per cent said claims are resolved faster when they worked with brokers.

Rejected or prolonged claims can have a devastating impact on your organisation, particularly when a large-scale event disrupts your business, such as a natural disaster or essential piece of machinery breaking down. These situations are where claims support from brokers is invaluable.

They can handle the necessary processes for making a claim, while you concentrate on getting your business back on track as quickly as possible. Brokers’ services therefore reduce stress during problematic times and give you additional peace of mind that your business is financially protected.

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71% of small businesses use a broker.

What’s the next step?

Working with an insurance broker can provide organisations with the flexibility and depth of experience required to meet their ongoing insurance needs.Businesses often build strong relationships with their brokers, and as a trusted professional they often become an integral part of the team.

If you are looking to optimise your insurance coverage and think working with a broker may be right for you, the next step is to choose a broker who can offer the right skills, experience and industry knowledge. Look in to your options. Talk to colleagues or acquaintances, research online and call a couple of a brokers for a chat.

Rothbury Insurance Brokers are happy to talk. We have years of experience providing the best insurance advice and solutions to clients and helping them get the best outcomes when claims arise.

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