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What is an Insurance Broker?

08.19.2014 By Elliott Insurance Insurance News

Working with an insurance broker is an easy way to ensure the appropriate insurance is in place for your needs. Insurance broker offer a unique…

Insurance brokers help make the process of finding the right insurance easier for you and your business. Working with an insurance broker is an easy way to ensure the appropriate insurance is in place for your needs.

The role of an Insurance Broker

An insurance broker works with you and your business to offer wide ranging assistance with insurance and risk related issues, from offering advice to handling complex claims.

The roles and responsibilities of an insurance broker can include:

  • Assessing the risks and associated insurance needs of the business
  • Assisting the client to ensure that all risk related issues have appropriate cover
  • Providing quotes and recommendations on appropriate insurance packages
  • Ensuring the appropriate insurance package is in place
  • Providing assistance with paperwork
  • Managing insurance claims on the behalf of the client
  • Regularly reviewing the insurance needs for the business
  • Providing professional advice to the client whenever required
  • Offering general information on claims
  • Providing a new quote to the client each renewal to ensure optimum value for money

If you need assistance with any other issues, your insurance broker will also be able to discuss these with you and provide advice.

The Insurance Broker/client relationship

Once you make contact with an insurance broker, the following process occurs:

  1. Initial meeting
    The broker will obtain all appropriate information from you to ensure that your insurance needs will be adequately met and all business related risks covered. You will have the opportunity to meet with the broker and make sure they are the right person for the job.
  2. Quotes and recommendations
    The broker will review the available insurance packages and find one that best suits your business needs. They will also provide a comprehensive quote and fully explain what will be covered.
  3. Implementation
    Once the broker has found a package that you are happy to proceed with, the broker will put the policy into place and ensure you are provided with the appropriate paperwork.
  4. Review
    The broker will continue to review your policy and compare it to that offered by other insurers on a regular basis to ensure that you are provided with the best deal, particularly if your business related risks change. This includes ensuring that the price remains competitive.

Online insurance

With technological advances, it is easier than ever for quick and reliable quotes to be completed via online forms. This is a convenient way to obtain insurance for clients who simply do not have the time to meet with an insurance broker.

Online services offer you a time saving way to have appropriate insurance put in place, with the knowledge that a qualified insurance broker will be managing your policy.

The typical process for online services involves:

  1. Requesting a quote
    You will be required to fill out an online form which will include a number of details. Generally, the more complex forms will result in a more accurate quote.
  2. Receiving a quote
    Your online enquiry will go to a qualified insurance broker who will contact you if any additional information is required and find the best insurance package for your needs. They will then contact you via phone or email with the quote.

After these first two steps are complete, the process of implementation and review is the same for your policy as it would be if you had initially met with your broker.

The services you receive from an online insurance broker are the same as those of a traditional broker and it is simply a case of deciding which approach best suits you.

Qualifications of an insurance broker

To be an insurance broker in Australia, individuals must have appropriate qualifications.

This usually means having Tier 1 or Tier 2 in general insurance compliance, but many brokers also have additional diplomas or degrees. Additionally, insurance brokers are required to hold an Australian Financial Services Licence (AFSL) or be authorised by a licence holder. A broker who is authorised by a licence holder is known as an Authorised Broker and is no less qualified or experienced than a licence holder.

To ensure they remain fully up to date, insurance brokers are also required to complete professional development and must complete a certain amount of industry specific training each year.

Remuneration for an insurance broker

Insurance brokers generally receive commission from the insurer once they have signed a client to a particular package. The amount of commission provided tends not to vary significantly and there is therefore no incentive for an insurance broker to favour a certain insurer.

Brokers also generally charge a broker, or admin fee and this is added the insurance premium. This charge covers the additional work that brokers complete on behalf of the client and the amount varies widely.

The individual broker often does not receive the commission or broker fee, which is instead retained by the business for wages and other expenses, with the broker receiving a salary.

Benefits of an insurance broker

Using an insurance broker is the best way to ensure you have the most appropriate insurance package to cover the specific risks and needs of your business.

Without the appropriate advice and information from an insurance broker, many businesses may find they do not have the correct cover when something goes wrong. Insurance brokers have the knowledge to ensure that all risk areas are covered and can provide peace of mind for you and your business.

Please don’t hesitate to contact the friendly staff at Elliott Insurance Brokers and we would be more than happy to answer any questions or discuss your business needs.