Claims time is the moment of truth for insurance policyholders, and when the value of a product that can put businesses back on their feet after an accident or disaster is truly appreciated. In difficult economic times, having that peace of mind is also more important than ever.
Having someone to advocate on a business’ behalf and keep across the details after a claim
is lodged is additionally an advantage that’s often underappreciated until the moment arrives.
The annual Vero SME Insurance Index, based on a survey of 1750 businesses, this year finds that 68% of broker clients who made a claim were satisfied with their experience, compared to only 48% of clients who buy in the direct market without support from an adviser.
The difference becomes starker when looking at complex policies. For example, 85% of broker clients were satisfied with professional indemnity claims compared to only 46% of direct clients, while for machinery and equipment breakdown there was a 16-percentage-point gap.
Reasons for the higher satisfaction levels when using a broker include effective communication and greater clarity through the process. For some it reflected receiving the full amount of the claim.
Broker usage is associated with higher levels of pay-outs, with 55% of clients in the survey reporting more than half their losses were covered, compared to 38% of direct buyers.
The success of claim outcomes goes back to discussions when policies are taken out or renewed. The report further points to the advantages from talking with a broker whenever changes are taking place or are planned within a business.
The survey finds that 61% of businesses are planning some form of change in the next 12 months, ranging from expansions to downsizing or preparing to sell.
Simple things, such as adding product lines or online capabilities can affect insurance coverage, while more complex changes, such as buying a new premises, renovations or employee contract variations, could have major implications or even result in coverage not being available.
The impacts of rising costs across the economy need to be considered as high inflation rates and supply chain pressures present underinsurance risks. The report finds only 29% of businesses say they have considered increasing replacement costs involved with claims when renewing cover.
Insurance is complex and businesses are operating in an uncertain environment. Whether taking out a new policy, renewing or considering changes, it’s well worth talking with a broker. Hopefully, there won’t be a claim, but if there is, those discussions could make all the difference.