Independent insurance brokers may be misunderstood, but they can offer a unique perspective, says Mark Jackson of BLG.
Many people look at independent advisors as middle men who do very little and take a great whacking commission out of any deal without any of the responsibility. Well, those in the insurance world know all about middle men… or brokers as we are known. Years ago the industry was full of them, on the high street selling car and household insurance. Times have changed though.
In our regulated world the role of a broker is quite clearly defined and allows brokers to be independent or tied to a particular insurer. They must state to the consumer whether they offer advice on other products and other insurers in the market. Some insurers own shareholdings in brokers. I question just how independent that makes the broker, but that’s just the old cynic in me.
When taking professional advice on something as important as insurance, it makes sense for that advice to be completely independent. The independent professional broker is able to search out different products and match them to your needs. However, no broker can be an expert in all forms of insurance. Building and Land Guarantees (BLG) has expertise in construction defect and warranty insurances.
BLG concentrates on this very specialist area and is proud to be widely acknowledged as an expert within the field. When a developer or client enters administration or receivership, the issues surrounding the provision of warranties for residential or commercial property can be quite complex – particularly for an insolvency practitioner who only occasionally gets involved with warranties.
Over the past five years BLG has handled many millions of pounds worth of property in receivership. Our independence within the insurance market allows us to approach various insurers and to provide crucial guidance on the service levels and timescales of the insurers. Thus we are able to match the right insurer to the project. That insurer may not be the cheapest but we will explain to you the reasons we have proposed an insurer and discuss all the options available. If you speak to a provider directly, they cannot provide any guidance on any other insurer. Therefore, are you getting the warranty issued as quickly as required and for a competitive level of cost?
When it comes to independence, there are a number of things to consider:
How is the insurer/broker owned?
If it’s owned by a shareholder that owns other businesses which provide products and/or services to it, then its independence is impaired.
Is it able to offer alternative quotations?
A truly independent broker will approach a number of insurers and be able to discuss the various options available.
Is it able to compare and contrast policies?
If they can only discuss one product, or products from one insurer, then are you fully aware of the alternatives that may be available and be more suited to the project?
Is the quotation offered competitive?
You will only know this if you obtain a range of costs and solutions. Can you afford the time to research the insurance market and do you have the experience to analyse the results?
These are just a few questions that you should ask yourself when considering purchasing construction defects insurance. Of course, you could always ring Mark Jackson at Building and Land Guarantees Ltd instead!
For further information: