SMEs and insurance brokers

Insurance brokers can play a valuable role in helping small or medium-sized enterprises (SMEs) arrange cover for their businesses. Find out more about their services.

If you own a small or medium-sized enterprise (SME) you need access to insurance products to protect your business if things go wrong.

Many SMEs rely on the services of insurance brokers to help buy insurance. However, our 2014 review of insurance brokers found that their service when arranging insurance for SMEs is not always consistent with customers' expectations. 

To make sure you are happy with the service you receive, here are 5 steps to checking the work your broker does.

Check whether your broker is providing you with advice

Some brokers will provide advice when arranging your insurance, while others may not. Brokers that do provide you with advice and a recommendation will assess whether the policy they are recommending is suitable for your business needs.  

Brokers that don't provide advice will consider whether you are eligible to claim under the policy and check it's consistent with your insurance demands and needs. However, they won’t provide a personal recommendation on whether it’s the right policy for you.

This could mean you don't get the appropriate level of cover for your business. You should consider carefully what cover you may need.

It is also a good idea to check if the broker you intend to do business with is an ‘Appointed Representative’, which means they are doing regulated business on behalf of another firm, known as the principal firm. Find out more about Appointed Representatives, including what to do if you need to complain.

Check the range of quotes your broker has given you

In some cases, brokers may only arrange policies with a single insurer without considering alternative insurers and getting other quotes. This could be because they have negotiated better coverage or other policy improvements with a single insurer.  

However, choosing a broker that uses a limited number of insurers may increase the risk that you’ll pay more for your insurance than you would have if other options had been considered.

There’s also the chance that they do not have the right product for your business.   

If you are concerned about the range of quotes, the price, or the quality of cover, check with your broker about any alternatives that may be available. If necessary, you may need to approach a different broker for your needs. 

Check the finance your broker has arranged

If you need to spread the cost of paying for your insurance, make sure you know how much more it will be.

Ask your broker whether they have thought about other financing options that might be cheaper (eg from the insurer providing your cover). You can then compare these to the first option they provide. 

Consider whether other, cheaper finance options are available (eg use of an existing overdraft or business finance). 

Find out how much commission you are paying

Our rules give you (as a commercial customer) the right to receive information on the commission your broker makes, if you ask for it. This will help you to better understand the cost of the service they provide.

This includes all income earned from arranging your insurance, including from premium finance and add-on policies.

Page updates

: Editorial amendment page updated as part of website refresh