Wednesday, January 5, 2011

How to choose the right insurance broker for your business

Sadly, the importance of choosing the right Insurance Broker is generally understated, in fact a lot of the time the broker isn’t chosen at all, they are simply employed by default for having the cheapest policy, or the policy with the longest list of unnecessary features. However, as anyone with a great broker will tell you, it’s well worth doing a little homework up front when you are looking for someone to protect what’s most important to you; because leaving it to chance could end up costing you a lot more than time.

The following is a list of tips and information to help you in finding a quality insurance broker: 

 1. Choose an insurance broker from a reputable insurance broking firm that meets all ASIC requirements 
All brokers are required to be licensed by the Federal Government’s Australian Securities and Investments Commission (ASIC). Most brokers will display their license numbers on their websites and other documentation, if their license number is not displayed - request it. Licensed insurance brokers are regulated by ASIC and must comply with the requirements of the Australian Financial Services Licensing. They are also required to participate in a Government approved consumer complaints handling scheme.

2. Choose a qualified broker
An insurance broker is someone that you trust to give you advice and assistance with the protection of your business, your property, your income and your staff. Wrong, out of date or unethical advice could cost you dearly, that’s why it is so important to deal with a true professional. Don’t make the mistake of assuming you are dealing with a qualified individual – ask for verification if you have doubts as to the broker’s capability or qualifications. 

There are a number of qualifications insurance brokers can hold, these are typically displayed on their business cards however this is not always the case, so it’s best to ask. 

Some common and highly regarded qualifications are explained below:

ANZIIF’s CIP (Certified Insurance Professional) program, CIPs are insurance professionals with an Institute qualification or recognised equivalent, who maintain up-to-date technical skills and knowledge through continual professional development and abide by the ANZIIF Code of Ethics, ensuring best standards of professional practice and integrity. Being a CIP is a symbol of insurance professionalism. 

Qualified Practicing Insurance Broker (QPIB), is another strict system of professional accreditation, introduced by NIBA in 1992, to ensure the highest professional standards. Insurance Brokers who are QPIBs are obliged to meet and maintain rigorous standards of knowledge, skills and behaviour to retain their accreditation. A QPIB accreditation is a good indication that you are choosing a highly professional Insurance Broker.

In addition to the accreditations CIP and QPIB some brokers may also hold a Certificate or Diploma of Financial services. Each Certificate or Diploma requires the completion of in depth studies in a specific area, the most common being General Insurance or Insurance Broking. Qualifications are generally displayed in abbreviated format; for example: Dip FS (Insurance Broking) indicates a Diploma of Financial Services in Insurance Broking.

3. Choose an insurance broker that can assist you with claims advice
Water starts gushing down from the ceiling in your office, water is going everywhere – you’ve evacuated all the staff, but what should you do now? You know you have insurance but is this particular incident covered? Do you have to notify anyone yet? Can the insurer assist with temporary office facilities so you can get back to work? 

Your broker or insurance broking firm’s claims department should be able to provide you with advice and obtain answers to your questions. Before choosing a broker you should ensure that claims advice is available 24hrs a day 7 days a week should you need it.

4. Choose an insurance broker with a claims processing service
Unless you have a lot of time on your hands and enjoy dealing with large insurance companies it’s best to choose a broker that will do it for you. Your insurance broker should be able to assist you in completing any necessary forms and should be willing to liaise with the insurer on your behalf. You may also want to check that there are no claims processing fees levied with this service, a reputable broking firm should look after your claim from start to finish without charging you any additional fee. 

5. Choose an insurance broking firm with a wide range of services to meet all of your business or personal needs
Whether you are a business or an individual you are bound to need more than one type of insurance product or service, so make your life a lot easier by choosing a firm that can service all your requirements, this way you establish a relationship where you can ask all your questions in the one phone call and you’ll know exactly who to call any time you need insurance related advice. 

6. Choose a broker that can arrange premium funding on your behalf
Do you prefer to pay your insurance in installments, rather than all in one go? If so, you are best off asking if the insurance broker you are considering can arrange premium funding for your policies. 

For more information; or for an insurance broker that meets all your requirements, contact Coverforce today.

IMPORTANT: General Advice Warning General advice on this website has been prepared without taking into account your objectives, financial situation or needs. Before acting on the advice, consider its appropriateness. Consider our disclosure documents, which include our FSG and Product Disclosure Statements PDS) for some products.

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