Why it pays to use an insurance broker

Only a modest percentage of commercial insurance policies are placed by policyholders directly with insurance companies. Why does using a good broker have such a big advantage?

If you are responsible for arranging insurance for your business, you have a duty to ensure that it is done correctly, which is nearly impossible without the necessary insurance knowledge and expertise.

A competitive premium is an important purchasing decision, but it certainly should not be the only argument for choosing particular insurance policies. There are other factors that must be right for the product to work well. An insurance broker can help with this.

We provide four factors why companies use an insurance broker:

1. Increased supply

The majority of the more than 200 commercial insurance companies operating in the Netherlands do not do business directly with companies. They only accept applications submitted to them through an insurance broker.

Why is that? The broker is the insurance company's main route to market, and this arrangement reduces expensive marketing and administrative costs for the insurance company. The "network" of brokers generates new business.

Brokers are insurance experts and speak the same insurance language as the insurer. Therefore, it is much easier and more cost-effective for the insurance company to work with an insurance broker than directly. This arrangement justifies more competitive premiums.

2. Lower premiums

Contrary to popular belief, using a broker is almost always cheaper than dealing directly with an insurance company.

Why is that? Because of reason (1) above, and a good real estate agent knows the market and available rates best. They are involved in this on a daily basis.

A good broker will negotiate a premium with insurers using a combination of technical arguments, commercial weight and, of course, their business relationship. Trust and respect is an important part of the relationship between the broker and insurer and can make a big difference in the final terms agreed upon.

3. Avoid exclusions

There are hundreds of different insurance policies on the market, and they are usually complex documents, full of insurance terminology and legal jargon.

It may look the same but appearances can be deceiving. It takes a trained eye to fully understand what is covered and what is NOT covered.

Most companies need to tailor their policy somewhat to ensure it meets their specific requirements. An insurance broker points out exclusions so that there is optimal coverage - nice in the event of a claim.

4. More successful claims handling

A claim can be an unpleasant and stressful experience and can involve significant amounts of money. An insurance broker will provide advice and support throughout the process.

And wouldn't it be if every reported claim was voluntarily accepted by the insurance company? But the reality is that more than 50% of commercial insurance claims are contested in some way by the insurer. A broker can help you file a claim correctly to ensure that your claim is fairly accepted and paid by your insurer.

A broker always works on the client's side to achieve the best possible outcome in claims.

Part of your consulting team

A professional business needs an insurance broker to advise on insurance just as much as an accountant to advise on its accounting or a lawyer for legal advice. They will be an essential part of the business advisory team, and using a broker is ultimately cost-effective.

Brickbase is happy to help advise on the right insurance so that your business is cost-effectively insured. Do you also want to make sure you are optimally insured? Book easily book an appointment online with one of our insurance professionals.

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