What Does an Insurance Broker Do?

Your insurance broker is there to make your insurance work for you.

An insurance broker is an expert on how to manage and mitigate risk. Your insurance broker is there to help you find the most effective way to protect your family, your assets and your business.

A good insurance broker is not there to sell you insurance. A good insurance broker is there to discuss your risks to that both of you develop a clear understanding these. The broker can then suggest insurance to cover the risks that are too large to be comfortable for you. Good insurance broking is a very personal service.

When it comes to buying insurance a broker can advise you on the best insurance policy. All insurance is not the same. A Professional Indemnity insurance from one carrier will not be the same as the same type of cover from a different insurer. Insurance is a contract between the buyer and the insurer. It is subject to bother general contract law and special insurance laws. The key areas of an insurance contract are:

  1. The covered risks. This specifies all the events that causes loss on which the insurance will pay a claim.
  2. The exclusions. This covers risks that the insurance specifically does not cover.
  3. The warranties. These are specific actions that the buyer of insurance will take to reduce the risk. If the insured is in breach of a warranty then the insurer might not have to pay a claim.

Your insurance broker will understand these and be able to advise you on them. A broker is there to ensure that you get the right insurance and a good price.

If you need to make a claim on your insurance, your broker will be able to advise you on how to begin the process, complete the paperwork and whether the settlement offered by your insurer is reasonable.

Insurance broking is a regulated business. You should only use an insurance broker that is regulates in the European Union. Most brokers in the UK will be regulated by the Financial Conduct Authority (FCA). You can check is a broker is on the FCA register.

The British Insurance Brokers' Association (BIBA) is the main trade association for insurance brokers. BIBA membership is another indication that a broker meets good standards.

The Insurance Explained Blog provides Six top tips for choosing an insurance broker.