Doctor, doctor, is it okay to buy business insurance online, or should I speak to a broker?
Buying insurance is a lot simpler today than in the past, with the internet giving you quick and easy access to the various home, travel and motor policies on offer. With a few clicks you can be insured, without leaving the comfort of your sofa, or even picking up the phone.
The same can be said for tradesmen and most small retail businesses, with relatively standardised policies available through generic online providers. However for the modern digital businesses, you may need to dig a little deeper to get the right type of cover.
When is it okay to buy online?
As a growing tech or media business, you’re likely to have more complex needs than a more traditional small business, so you should always look for a specialist provider – whether online or offline – that understands your business risks. Fortunately, you can now find specialist online policies designed for the needs of digital businesses.
Buying online through a specialist provider is a good option, so long as your business has revenues of less than £2m and your business doesn’t operate in a particularly niche area, or trade abroad. These points are important, as online forms can only provide a finite list of possible business activities, often not allowing for niche areas such as FinTech, HealthTech, SaaS, games development, etc, although this is improving with specialist online providers.
Choosing a business sector that exactly matches what your business does is particularly relevant following introduction of the Insurance Act which came in to force in August 2016. The Act sets out your responsibilities to disclose certain information to the underwriter, and in which circumstances where information has not been properly disclosed that the underwriter does not have to pay a claim.
The benefits of talking to a broker
If your business does have revenues of over £2m, you should be talking to a broker, as your level of risk will be that much higher than a smaller company. Similarly, if you’re a smaller business, but operate in a niche area, or if you trade abroad, an online product may not cover your specific business activities.
If this sounds like you, a broker can help guide you through the process, prompting you on all the details the underwriter needs to know and tailoring cover for your business activities, rather than offering a generic product. So you can be sure there won’t be any surprises later on.
Alongside ensuring you buy the right level and type of cover, a good broker can also help you secure a good price and advise on the underwriters that have the best service. Sometimes they will also manage the claims process for you as well providing ongoing advice, as your situation and requirements change over time.
Of course, if you do consult a broker, you need to be prepared to pay a fee, usually charged as a percentage of your premium, depending on the type and level of insurance you’re buying.
When choosing an offline broker, again your top priority should be to find one that specialises in businesses like yours, both in terms of the sector and the size of the company. It’s impossible for them to provide well-informed and reliable advice if they don’t truly understand what you do and the risks involved, particularly in the digital sector where the technology and associated risks are evolving so quickly.
Not sure what type of business insurance you need? Check out this previous article by Ben Rose.
Digital Risks (www.digitalrisks.co.uk) is a specialist insurance provider that focuses 100% on the needs of digital businesses.