Business Insurance - Don't Do Your Brokers Job For Them
If you are running any form of business, the chances are that you will have some form of business insurance in place
. It might be just the legal minimum, it could be just the liabilities or you could have cover for your business assets and buildings as well.Apart from travel and marine cargo insurance, most forms of business policy are annual. They run from year to year, similar to your car and house cover. Surprisingly enough, there is no legal requirement upon a broker or insurer to even offer you a renewal. If they insure you for a year and then decide that they do not want to do this again, they can choose to do so. This usually only happens when a risk has had so many claims that insurers just do not want to take the risk again that they will pay out more than the premium.
However, in the vast majority of cases insurers do want to have your custom, as a policyholder, for a further year. They do not have to offer you the same cover nor do they have to offer the same premium. Their renewal offer can be under whatever terms they choose. If you deal through a business insurance broker then they really should point out any differences in the cover. It is usually easy enough for you to spot a price hike, but a subtle change in the cover (which may be in yours or the insurers favour) is usually a bit harder to spot.
So, the insurers want to renew your policy, but, as when you took out the policy in the first place, you can choose whether you want to move elsewhere. If your premium has increased by a few percent, then you may well decide to stay put. But, if your premium has gone up over, say, 5% and you have not had claims, you should really start to question whether this is a good deal.
Your broker must offer renewal "within reasonable timescales". Therefore, ten to four on the day before renewal may not be reasonable, but the broker can still get away with this.
Here at Businessinsure though, we have an issue with many business insurance brokers. What they tend to do is offer renewal with the existing insurer without even considering the alternatives. We do not advocate a broker chopping and changing your insurance cover year in year out. This way they are not promoting you as a loyal customer.
But, if they just offer the same policy, at an inflated price, you may feel compelled to look elsewhere. Usually, this will be to doors similar to ours. We will then look around and get you a nice competitive alternative. Then, your existing broker phones up to see if you will renew, you tell them no because you have got a better deal and all your broker does is matches the price.
We see this every day of the year. Insurers are so desperate to keep business they will capitulate on prices increases before you can say, "no wonder people mistrust insurers". But, the question is, if we can get a better quote so quickly, why did your existing broker not bother?
You have done their job for them. They should have sought alternatives and then challenged the holding insurer to compete. Instead, you have had to take time out of your busy life to do this job for them. And they simply think that by reducing their price to match, you will stay with them! Now, don't forget that your broker earns 20% commission on that premium, if you choose to stay with them, have they really earned their money? Or should you bite the bullet and move to the more progressive, competitive company?
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