Insurance brokers play a pivotal role in connecting clients with suitable coverage options. But when it comes to safeguarding their own interests, even brokers could stand to gain from placing their professional indemnity insurance (PII) elsewhere.
Below, we’ve summarised some of the key advantages:
Fresh perspective on coverage needs
Engaging with a different broker offers an alternative insight on the specific risks associated with the insurance brokerage profession.
Experienced professionals can identify potential coverage gaps that might have been overlooked. At the same time, they can tailor a comprehensive policy covering all lines of insurance, including but not limited to professional indemnity, cyber, D&O, and combined commercial.
Access to diverse markets
Leading brokers have access to diverse markets and exclusive facilities that smaller brokers might not. Placing PII with this broader market access can result in more competitive rates and better coverage terms.
Risk mitigation through specialisation
Any brokers specialising in PII offer a deeper understanding of the unique risks faced by insurance professionals. This can help to deliver a more nuanced and tailored policy, addressing industry-specific challenges.
Avoiding conflicts of interest
Placing PII with a specialised broker helps mitigate potential conflicts of interest. This separation ensures that the broker responsible for securing the coverage remains impartial and prioritises the best interests of the insured.
Market leverage
A leading broker’s reputation and market access provides enhanced negotiation leverage. Brokers can leverage competition among insurers through their broker’s access to exclusive facilities and the wider professional indemnity market. This can help to secure more favourable terms, potentially resulting in cost savings and improved policy coverage.
Benchmarking
Comparing quotes and coverage options enables insurance brokers to benchmark their existing coverage against other industry peers. This process facilitates a better understanding of the value offered by their current policy and helps identify areas for improvement. Benchmarking services helps brokers gain a better understanding of what levels of PII other brokers buy.
Conclusion – a sensible strategy
Insurers brokers understand the insurance market better than anyone, so it’s little surprise that few brokers would consider placing their own coverage via a separate broker. However, for those that do, there are several benefits to be had.
Ultimately, it’s a strategic move that can enhance brokers’ overall risk management and ensure the long-term viability of their practice.
For more information, visit our Insurance Brokers & Independent Financial Advisors (opens a new window) page, or contact:
Simon Hall, Client Service Associate, Profin
E: simon.hall@lockton.com
