You don’t have to, it’s up to you. But, before you go it alone, it would be a good idea to take some notes of the following and read everything, then read it again, then read it again until you understand it.
Firstly you will need to determine which insurances you are required to have under legislation (Law), then determine how you will insure each part of your business and the values you would need to insure each part for and then read the policy wording to see how the insurance policy would respond to how you have insured your business.
If you are dealing with a direct insurer the onus is on YOU to read all the documents they provide and if they don’t provide such things as the PDS/Policy Wordings you may need to go searching for such documents on the insurers websites, then download and/or print them yourself and then read them yourself making sure you understand everything written in them.
It is also important to establish who is actually on your side. As such you need to understand the difference between a “Broker” and an “Agent”. Always check the fine print as some agents call themselves brokers however if you read the fine print you may actually find that they are in fact agents for the insurers.
A “Broker” in the truest sense of the word, represents the client and obtains quotes from many different insurers on your behalf.
An “Agent” is a representative of the insurer, in other words a salesperson for an insurance company.
Also, if you have opted to deal direct with an insurer, you will also be on your own if you need to make a claim. It will be at this time that you will find out whether or not you have been diligent and requested the correct type of insurance covers and insured amounts and how the policy that you have arranged and its policy wording will respond to what you may be claiming.
Why would it be a battle for me when I make a claim you may say? Simple statistics tell us the answer to that one, and you are not alone here, this is also something that State & Federal politicians and their bureaucrats don’t seem to understand.
The vast majority of insurance claims in Australia that are declined by insurance companies are the insurance policies that have been arranged by an individual directly with an insurance company. This is where the underlying issue begins, and it is human nature that is usually the culprit that leads to many claims being denied.
Quite simply, it’s human nature that tells us when we are arranging our own insurance to take the cheapest option and the old saying comes to mind (and most of us are guilty of this one) “ oh I don’t need to insure that, that’s never going to happen to me”! Then the ol’ “Murphy’s Law” kicks in and inevitably it does happen.
Usually the reason for someone dealing direct with an insurer is because they are after the cheapest premium possible, however in order to achieve the cheapest premium, most people elect to remove the amount of cover they have just to save a couple of dollars, unfortunately the couple of dollars they have saved when taking out a policy may end up costing them 10’s of thousands of dollars if they need to make a claim.
Please remember that Commercial Insurance is one of the most significant purchases you will make. The purchase of insurance requires knowledge, research, evaluation of the types of cover available and the insurers that offer the cover needed for your individual business.
If you engage the services of an insurance broker, they will work with you to identify the potential risks and help you navigate through the insurance jargon (policy wordings and their meanings) whilst also explaining covers and outlining exclusions, among many other factors.
Important: All answers and information contained within this article should be considered as General Advice Only. This advice should only be considered as General in Nature and its intent is only to prompt the readers to investigate their own individual insurances. It has been prepared without taking into account the readers own individual objectives, financial situation or needs. Because of that, before acting on the above advice, the client or any persons should consider its appropriateness (having regard to their objectives, needs and financial situation) and seek further independent advice from their own financial advisor.