Why use an insurance broker?
As insurance brokers, our priority is to represent your interests at all times, and to provide you with professional guidance in everything pertaining to your insurance in a market that’s forever changing in premiums, product availability and policy conditions. IBAU’s has a group of Qualified Practising Insurance Brokerage companies who clearly understand the differences between various policies and are often able to negotiate premiums that aren’t available to you.
HOW IS AN INSURANCE BROKER REMUNERATED?
Insurance Brokers receive a commission (brokerage) from insurers on the business they place with the insurers.
What’s the difference between an insurance agent and an insurance broker?
- An insurance broker has a duty of care to you and must act in your best interests,
- insurance brokers will attempt to source the most appropriate policy on your behalf at a competitive premium.
- An agent represents the insurance company and therefore has no direct responsibility to ensure that you are getting the most appropriate policy available, only to ensure that you are getting the most appropriate policy from the company’s range.
Are insurance brokers licensed and regulated?
Insurance brokers are licensed by the Insurance Regulatory Authority of Uganda (IRA).
How can I be sure an insurance broker will pass on my premiums?
IBAU member brokerage firms (insurance brokers) are subject to stringent legislative requirements concerning the receipt and payment of premiums.
A case in point is the “Cash and Carry” statutory provision in the Insurance Act 2017 that was introduced in January 2019.
Section 63 (1) of the Act stipulates that all insurance policy holders pay in full all the premiums payable under the insurance contract on or before the date of inception of the policy or renewal of the policy. Its operationalization means that insurance brokers had to collect premiums upfront before providing insurance cover for all classes of insurance. Henceforth, this move sought to ensure that insurance brokers immediately pass on client’s premiums to the insurance firms immediately (upon receiving it).
What insurance policies do I need?
This depends on the type of business you are in. New insurance policies are being developed constantly as the world and the risks you face change.
As an example, even 20 years ago, how many businesses would have considered having insurance for loss of profits due to computer crime? Insurance Brokers undergo regular training and remain abreast of all developments within the industry, so they are well placed to regularly review your risk areas and advise accordingly.
Should I simply look for the cheapest policy?
Insurance policies can be very complex, and the cheapest policy will not always meet all of your needs.
Sometimes what is left out of a policy is as important as what is included, and the cheapest option may omit a risk that you cannot afford to carry yourself.
Interpreting the terms of the policy is part of your IBAU broker’s role and you should listen to their advice as you would to a doctor or lawyer.
Although, the policy cost will always be a factor, ensuring you have the right cover in place when it comes to the time to make a claim is vital, and our top priority.
How much insurance is enough?
The first step in determining the answer to this question is to work with your broker to identify and define the areas of risk for you or your business. The decision then is which risks to retain (ie, not insure) and which risks to transfer through insurance. The sums insured should be relevant to the risk, taking special care not to underinsure and be subjected to co-insurance clauses.
Choosing to take the risk yourself to save money can leave you vulnerable and may severely affect your cash flow or assets. This is where our experience can assist you in making decisions on how much insurance you require to adequately cover your various risks.