Business insurance can help protect businesses from the financial impact of unexpected events, but finding the right cover is not always straightforward. A business insurance broker can help business owners understand their risks and find a policy that suits their needs.
What is a business insurance broker?
A business insurance broker is a licensed insurance professional who helps businesses find and arrange insurance. Unlike an insurer or insurance agent, a broker works on behalf of the client.
They act as an intermediary between the business and the insurer, using their expert knowledge of insurance products and markets to help identify appropriate cover for the business’ circumstances.
What do business insurance brokers do?
An insurance broker’s role is to understand your business, identify risks you may need cover for and recommend insurance options that might suit.
They can provide support at different stages of the insurance process, from working out what cover may be needed through to helping with claims. This can include:
- Reviewing your business operations, industry, revenue, staff, premises and key risks
- Explaining different types of business insurance and what they are designed to cover
- Approaching insurers or underwriting agencies for quotes
- Comparing policy features, exclusions, limits and excesses
- Recommending cover based on your stated needs and circumstances
- Helping arrange, renew or adjust your policy
- Assisting with claims, including helping you complete forms or liaise with insurers
How much does it cost to buy business insurance through a broker?
The cost of using a business insurance broker can vary depending on the complexity of your business insurance needs and how the broker is compensated.
There are two common ways business insurance brokers are paid, though some may use a combination of both:
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Commission from the insurer
Many brokers receive a commission from the insurer when they arrange a policy. In this case, the broker’s payment is built into the overall cost of the insurance, so you won’t usually see a separate fee for the broker’s services.
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Fees charged to the client
Some brokers charge a broker fee, either as a flat rate or as a percentage of the premium. This is charged in addition to the premium and can vary based on the broker’s pricing structure and the work required.
Under the Insurance Brokers Code of Practice, brokers must explain how they are paid before you go ahead. This includes any commission, client fees or other benefits they receive when acting on your behalf. This will be outlined in the Financial Services Guide (FSG) and on your broker quote.
How to choose your business insurance broker
Choosing a business insurance broker is not just about finding someone who can get you a quote. You are trusting them to understand your business and help you make decisions about important protection.
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Check their licence
The first step is to check whether the broker is properly licensed or authorised. In Australia, an insurance broker will need to hold an Australian Financial Services (AFS) licence or be an authorised representative of an AFS licensee. You can check whether a broker is licensed by searching ASIC’s Professional Registers Search.
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Ask about their experience
It’s also worth asking about the broker’s experience with businesses like yours. Some brokers specialise in certain industries, business sizes or types of cover, so you want to feel confident they understand the risks your business faces.
You can ask questions such as how long they have worked with businesses in your industry, which types of insurance they commonly arrange and whether they have handled similar businesses before.
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Understand their fees and commissions
Before agreeing to buy through a broker, ask how they are paid. They should be clear about any broker fees, service fees, administration charges or commissions that apply. This helps you understand the cost of using their service and whether any payment arrangements could influence the policies they recommend.
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Check reviews and testimonials
Reviews and testimonials can give you a better idea of what it is like to work with your broker. Look for feedback on their communication, responsiveness, claims support and ability to explain policy options clearly.
It can also help to ask other business owners in your industry for recommendations, especially if they have similar insurance needs.
The pros and cons of using a business insurance broker
Pros
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Saves you time
A broker can do much of the research and quote-gathering for you, which may be useful if your business is complex or you are not sure what cover you need.
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They may access specialist markets
Some brokers can access insurers, underwriting agencies or specialist products that are not always available directly to the public.
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Claims assistance
If you need to make a claim, your broker can help you prepare documents, communicate with the insurer and understand the insurer’s response.
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They can support complex businesses
If you operate across multiple sites, have higher-risk activities, use contractors, own commercial vehicles or need several policies, a broker may help coordinate your cover.
Cons
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They might not compare the whole market
A broker might only deal with a particular panel of insurers or underwriting agencies, so the options they present may not include every policy available.
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There could be extra fees
Some brokers charge service or advice fees in addition to any commission they receive from insurers.
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Risk of bias
Because brokers may receive commission from insurers, it is important to understand how they are paid and whether this affects the products they recommend.
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It may take longer than comparing online
Working with a broker can involve meetings, needs analysis and follow-up questions. This may be worthwhile for some businesses, but others might prefer a faster online comparison process.
Alternatives to business insurance brokers
A broker is one way to buy business insurance, but it is not your only option. Alternatives include:
Going directly to an insurer
You can contact insurers directly and request quotes yourself. This gives you control over the process, but you will need to compare each policy’s wording, exclusions, limits, excesses and price on your own.
Going direct can work if you already know which insurer you want to use or have simple cover needs. However, it can take more time if you want to compare several insurers, as you may need to complete separate quote forms and review each policy individually.
Comparing quotes online through Savvy
The clearest alternative to using a broker is to compare business insurance quotes yourself online. Through Savvy, you can access a range of business insurance quotes from some of Australia’s leading insurers by answering a few questions about your business and the type of cover you need.
You can then compare available offers side by side, including the price, level of cover, policy features and excesses. This gives you more control over the decision, as you can review your options yourself rather than having a policy selected for you.
Comparing through Savvy can also be faster and more convenient than booking an appointment with a broker. You can receive quotes online in minutes and, if you find a suitable policy, arrange cover as soon as the same day.
How to buy business insurance through Savvy
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Tell us about your business
Provide details such as your occupation, business activities, location and the type of cover you are looking for.
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Compare available quotes
You can review a range of business insurance quotes side by side through Savvy’s partner, BizCover.
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Check the policy details
Look at the cover limits, exclusions, excesses, optional extras and premium before deciding which policy may suit your business.
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Choose and buy online
If you find a suitable policy, you can continue through BizCover to complete the purchase.
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Keep your documents handy
Once your policy is in place, store your policy schedule, Product Disclosure Statement and certificate of currency where you can easily access them.
Savvy is partnered with BizCover Pty Ltd to provide readers with business insurance policies to compare. Bizcover also has insurance brokers available if you can’t find the policy you’re after online. Savvy earns a commission from BizCover when a customer buys a business insurance policy via the Savvy website. Purchases are conducted via BizCover, and Savvy does not compare all business insurance policies or providers in the market.
