An insurance broker is hired in order to help your business obtain the appropriate cover. They assist clients by helping avoid risks or unnecessary expense. Some business owners consult an insurance broker for general insurance advice, although a qualified broker can also handle complex claims and legal matters.
Broker/client relationships take many forms:
- Business risk analysis
- Recommendations and quotes regarding insurance products
- Implementing insurance policies
- Assistance with forms and paperwork
- Providing advice regarding claims
- Annual revision of ongoing insurance needs
The first step in the relationship is to consult a broker regarding your needs. By learning about your business a broker can make recommendations about insurance and risks. The broker will analyse your situation and compile insurance quotes. When a satisfactory arrangement has been decided, the broker will provide you with policies and documentation. If the relationship with your broker is ongoing the policies will be reviewed before your next yearly renewal. The broker will also investigate competing insurers to locate the most competitive price for your insurance.
The changing face of business
In today’s environment, many business owners prefer to deal with a broker online. The internet is convenient for both parties yet you still get the services of a fully qualified insurance broker. The online procedure is the same as in traditional face-to-face dealings, and is simply a matter of preference. Many business owners like to get to know their broker in person.
Every Australian insurance broker must be qualified in general insurance compliance. Many will also hold higher level degrees. An Australian Financial Services Licence (AFSL) is held either by a broker or by the brokerage they work for, in which case the broker will be known as an ‘Authorised Representative’. Brokers are required to attend events and industry training every year in order to remain up to date regarding changes in insurance matters.
How much does a broker charge?
Commissions are paid by insurance companies to insurance brokers when a policy is arranged for a client. There is usually an accompanying broker fee. The cost is calculated according to the amount of work required in satisfying your insurance policy needs. Charges can range from $20 for some basic public liability policies to thousands of dollars for large corporations and government agencies. Some insurance brokers are paid a salary rather than commission with their employer retaining the fees to cover wages and expenses.
Is using an insurance broker a good investment?
Many businesses would be run less efficiently without an insurance broker. Financial loss can eventuate by not using the appropriate insurance policy. Business owners generally pride themselves in being self reliant, but there are many circumstances where utilising the services of a professional insurance broker is the smart approach.