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Posted in: Business Insurance
By Rowlands & Hames - 28 January 2016
At a glance
With SMEs increasingly tempted to shop online for their insurance needs in a bid to cut costs, small businesses need to be aware that cheap off-the-shelf insurance solutions can sometimes fail to provide adequate protection.
So, here are five reasons why small businesses should consider an intermediary when it comes to all things insurance.
1. Access to more products
Brokers tend to have access to more products than a customer could find direct. In commercial lines, the vast majority of business is traded by a broker and the direct market is not anywhere near as well defined. Using a broker provides choice of cover and price that may not be available elsewhere.
2. Not just plain vanilla
Most SMEs are extremely busy, so scouring the market to find the best deal won’t be the best use of their time. Instead of searching for insurance they could be concentrating on attracting new customers and servicing existing ones. This is where a broker may be able to assist as they can do the research and evaluate the various insurance options for the business.
3. Experts on risk
The pace of change in all areas of our lives is increasing. One example of this is changes in technology, which can provide savings in costs or access to new markets. However, there may be additional risks that the SME needs to consider and a broker may be able to help with this.
One example of this is that more and more businesses use the internet to trade, but product liability in respect of exports to the US may be excluded. Another example might be around office-based risk and the increasing use of allowing staff to bring their own device to work. There are potential data security issues here, which, again, a broker may be able to help an SME evaluate and source suitable cover.
4. Plugging gaps in cover
The recession forced many British SMEs to diversify in order to survive. This in itself has led to them being more complex and having more complex insurance needs, such as exploiting new technologies.
Examples of this are a plumber including solar panel installation or florists adding jewellery or other gifts to the goods they sell. Newsagents, too, are increasingly becoming depots for parcel collection and returns, and we have even heard of a case where a barber’s shop located by the coast was also selling buckets and spades.
5. Dealing with legal complexities
More flexibility in working practices in a bid to achieve a better work-life balance may mean that more help is needed from a broker to better evaluate the risks. Examples include an increase in employees working from home, where health and safety implications may arise, as well as data security/cyber crime issues associated with remote working.