In a hazardous and complicated world, insurance can be vital for small businesses.
However, the task of getting insurance can be time-consuming and confusing.
It can be tempting to go online and buy off-the-shelf insurance products rather than engage an insurance broker.
So, what's best for your business?
The ‘one-size-fits-all’ trap
Your small business is probably unique in the products and services you create and deliver, requiring the right sort of insurance cover to suit the running of your business.
Off-the-shelf products can be one size fits all – which isn't always suitable.
Small businesses often require tailored insurance policies written for their business to provide the protection they require, when they need it most. This is where using an insurance broker can be useful.
A broker can tailor a policy to meet a business's needs, reassuring owners that they are insured correctly in the event of a claim.
Off-the-shelf, ready-made policies aren't made with your exact risk profile or exact balance sheet in mind. It's made to fit a generic entity.
Brokers partner with their clients, providing expert advice and advocacy as well as looking after the insurance details.
“They'll use their knowledge and experience to review the market and explain terms clearly so you understand your cover ”
Reducing your risk
A good broker is a risk specialist. They understand and assess a business's risks, using their expertise to review all options and tailor cover to match the risks cost-effectively.
Businesses face a broad and expanding range of risks today, including emerging areas such as cybercrime. Brokers keep up to date with emerging risks and can advise on what is the best policy to cover them, tailoring covers to respond to these changes.
The value of conversations
Sometimes, you can't beat a human conversation about your business needs and risks. It can give a broker a greater understanding of your business and the right insurance for it. Brokers deliver personalised service because they take the time to understand your business and build long-term relationships.
Is cheaper always better in the long run?
While the rationale for using an off-the-shelf product is often the belief it saves money, it can be a false economy. The cover may turn out to be too generic and fail to adequately cover you in an emergency.
A broker has access to a variety of insurance companies and works on your behalf to obtain the best coverage at the most competitive premium rate.
As a non-expert, trying to work out the right insurance for yourself can lead to overestimating what your losses would be and can result in your paying unnecessarily high premiums.
A major issue for many Kiwi business owners is underestimating the cover needed. That means you're left significantly out-of-pocket when faced with an event. An experienced broker can help you strike the right balance.
And using a broker doesn't mean you'll overpay. A broker can analyse costs and benefits to identify savings.
They can find policies that match your business and bottom line, so you're not paying for cover you don't need.
Save your time
Many businesses buy off-the-shelf insurance, believing they are saving precious time. However, going through a broker can take the hassle out of arranging your insurance. They'll use their knowledge and experience to review the market and explain terms clearly, so you understand your cover and don't have to trawl through the jargon and fine print. They'll advise you what is exactly the right insurance to protect you.
Someone in your corner at claim time
When disaster strikes a small business – from a burst pipe to a major flood – it can be incredibly overwhelming for a business owner. That's where a broker can step in and trigger your insurance protection.
A broker can fight in your corner when it comes to making a claim, which can be complex and time-consuming.
They'll liaise with insurers on your behalf to arrange the best and quickest settlement possible and offer risk management advice to mitigate further losses.
Their help can severely reduce your stress levels at times of crisis, leading to smoother and speedier claim settlements and leaving you free to run your business.
Important notice
This article provides information rather than financial advice. The content of this article, including any information contained in it, has been prepared without taking into account your objectives, financial situation or needs. You should consider the appropriateness of the information, taking these matters into account, and seek appropriate financial advice before you act on any information.
Steadfast NZ Limited NZBN 9429034695685
Find a Steadfast Insurance Broker near you
Important notice - Steadfast Group Limited ABN 98 073 659 677 and Steadfast Network Brokers
This article provides information rather than financial product or other advice. The content of this article, including any information contained in it, has been prepared without taking into account your objectives, financial situation or needs. You should consider the appropriateness of the information, taking these matters into account, before you act on any information. In particular, you should review the product disclosure statement for any product that the information relates to it before acquiring the product.
Information is current as at the date the article is written as specified within it but is subject to change. Steadfast Group Ltd and Steadfast Network Brokers make no representation as to the accuracy or completeness of the information. Various third parties have contributed to the production of this content. All information is subject to copyright and may not be reproduced without the prior written consent of Steadfast Group Limited.