Should I use an insurance broker or go direct?

• If your cover needs are straightforward, going direct can be a fast, simple option.
• If you have more complex coverage and service needs, or your business changes from time to time, a broker could tailor your cover and negotiate deals on your behalf.
• Brokers can also support you at claims time.

When it comes to getting cover for their business, many small and medium enterprise (SME) businesses might be tempted to go direct to an insurer. After all, many of us will do that for our personal car and home insurance.

And in some cases, going direct could be the best course of action – for example, if you’re confident about the risks you face and you know the type of cover you need. You may save time, it’s typically a flexible and streamlined process, and you can be very specific about which insurer you choose.

For straightforward types of cover, you can also usually find what you need online, and you may be able to take advantage of online offers or multi-policy discounts.

However, Lorelle Hillman, General Manager, Partnerships, QBE Australia says because business insurance can be complex and ever-changing, engaging a broker may be the best option for some businesses.

“A professional broker can give you specialist and in-depth advice that goes beyond what an insurance customer service representative can provide,” says Hillman.

“If and when you need to claim on your policy, brokers will usually manage the claim on your behalf.”

Related article: The value of working with an insurance broker 

Think about using a broker if… you’re uncertain of the risks you face

Brokers are experts at spotting risks – it’s what they do, day in, day out. They usually bring in-depth, specialist knowledge about the industries and types of businesses they insure.

In more complex cases, insurers will generally request a wide range of information about the risks a business faces and what’s being done to mitigate those risks - before they’ll agree to the policy.

John Schroder, General Manager SME, QBE Australia, says, “Brokers are experts at knowing what information is needed to satisfy insurers, and knowing who to contact to get a deal over the line.”

“They also often have trusting, long-term professional relationships with insurers.”

Think about using a broker if… change is part of the everyday

For businesses facing change, a broker is often an asset.

“A broker can make sure coverage changes as a business does,” says Schroder.

They can help you regularly review your cover as you need it, keep your business up to date when new coverage becomes available, and provide advice on what any changes mean to the risks your business faces.

"Proactive brokers can also ensure you’re not paying for cover that your business doesn’t need," adds Schroder.

Think about using a broker if… you’ll appreciate support in the event of a claim

Insurance is one of the few things we buy but hope never to use – but if you do need to use it, a broker can be an important ally.

“Claims are naturally made at times of high stress. Having a broker who will guide you through the process, do all of the paperwork on your behalf, and represent your best interests can be invaluable,” says Hillman.

Related article: How to find the right broker

Think about going direct to an insurer if… you know what you need

If you’ve got a straightforward risk you need cover for, going direct to the insurer could potentially save you time.

“While call centre staff can’t give advice, they can share information about the products available and help get your cover sorted there and then,” says Schroder.

Think about going direct to an insurer if… your risks rarely change

Some businesses operate the same way week in, week out, and do very nicely for themselves with that approach. If your business rarely changes – and therefore, the risks rarely change – going direct may be the best option for you.

Using a broker or going direct – what’s the most cost-effective way of getting insurance?

It depends. Some insurance brokers work on a fee-for-service model, while others take commissions from insurers. A broker is obligated to disclose how much they’re getting from the insurer for placing your insurance.

If the broker charges you a fee, this will usually be advised up front. If you go direct, there’ll be no additional fees to pay to the insurer, as there’s no middle-man. However, brokers may customise and negotiate better deals with insurers than would be available if you go direct.

So, should you use a broker or go direct to an insurer?

Ultimately, it depends on your situation: the complexity of your business, the risks you face, and the level of service you’d like after you’ve taken out the policy.

If you’d like more information about finding a broker, read our guide on the things to consider and visit the National Insurance Brokers Association (NIBA) website. Its Need a Broker website^* helps you locate NIBA members near you.

* The brokers on this site are not employees or agents of QBE, but are independent entities. QBE is not responsible for any advice provided to you by any broker on this site. Any such advice is the responsibility of the broker concerned.