Business insurance broker vs direct to an insurer: which is better?

Getting the right business insurance matters. But when you're weighing up whether to use a broker or go straight to an insurer, how do you know which option is best for your business? 

We’ve put together everything you need to know to make an informed decision. 

Five-point summary: 

• Brokers vs Direct: What’s the Difference? - Brokers compare multiple insurers, including specialist providers and Managing General Agents (MGAs), which are businesses that underwrite and manage insurance policies on behalf of an insurer. Direct insurers only offer their own products. Brokers can often access better rates and more tailored cover, especially for complex businesses. 
• Cost and transparency - Many brokers are paid commission by insurers for each policy they sell, but always check for hidden fees. The FCA regulates brokers to act in your best interests and disclose commissions if asked. 
• Who should use a broker? Businesses with certain risks like hospitality, manufacturing, property owners or hybrid businesses may benefit from using a broker and access to tailored policies.  
• Renewals - Brokers often search for renewal quotes, giving you more choice compared to staying with one insurer. 
• Legitimacy - Always check your broker’s FCA registration to see if they are legitimate. 

Can I save money using a broker? Does it cost me extra? 

This depends on who you use.   

Many transparent insurance brokers are paid a commission from the insurers on their panel when they sell a policy. This can vary depending on the agreement with the insurer. 

But some may still charge hidden fees, so always check your terms and conditions or ask the broker directly. 

“When you take a policy out with us at Bionic, we are paid a commission directly by the insurer. There are no hidden fees, and we are always transparent with our customers.” - Tara Mitchell, Insurance Technical Advisor 

This doesn’t necessarily mean you pay more than if you went elsewhere. Brokers often access better rates because they bring insurers a lot of business, which may mean better premiums than going directly to an insurer. 

Access to specialist cover and MGAs 

While direct insurers only sell their own products, brokers can compare dozens of insurers, including specialist providers who don't advertise publicly - this may include access to MGAs.  

An MGA stands for ‘managing general agent’, and they often have specialised experience in complex, niche insurance types that an insurer may not have access to themselves. 

This means for businesses with niche or high risks like a craft brewery or specialist contractor, for example — that access matters. 

The FCA regulates brokers to act in your best interests and will disclose commission if you ask. If you want to check, you can ask your broker what commission they're earning, and they should tell you. If they won’t, then you should be wary of using them.  

When should I consider going directly to an insurer? 

Some of the big insurers can be competitive on pricing for ‘straightforward’ businesses with standard risks – like small offices, basic retail or sole traders.  

More often than not, with an insurer, you can sort insurance online, especially if it’s standard cover. But many brokers also offer online purchase for standard policies. 

But remember, ‘one size fits all’ insurance doesn’t always work. 

If you want to make sure you aren’t underinsured, it might be best to speak to someone on the phone. 

At Bionic, we offer a hybrid approach. Start your quote online, then speak to a UK-based broker (if needed) who can help guide you through your options and get your cover sorted. 

Which approach is better for my specific business — broker or going direct? 

It’s a good idea to weigh up some of the pros and cons of both: 

	Pros	Cons
Insurance brokers	Access to multiple insurers  Access to MGAs  Good for complex needs  New quotes at renewal	Limited claims assistance (in some cases)
Direct to insurers	Standard packages  Established processes  Straight forward renewals  Deal with claims	One insurer

Businesses that may prefer using a broker 

Your business type may play into whether to use a broker or not: 

• Hospitality – Sickness claims due to food, fat fryers, and loss of licence protection need specialist cover. Standard policies may exclude the cover that really matters when it comes to key risks your business faces. A broker who knows takeaways, restaurants, hotels and more can find insurers who understand your business and can provide the right protection. 
• Manufacturing - Product liability, business interruption and supply chain risks are all areas brokers can be familiar with. They can help you find insurers who are comfortable with the risks in your sector, like insuring dangerous machinery and fire risks. Compare insurance for manufacturing businesses. 
• Professional services - Accountants, consultants, architects, and engineers should all consider having professional indemnity cover. When dealing with retroactive dates and run-off cover, these need to be arranged carefully so you’re not exposed to risk. A broker can often help you arrange cover for risks that come with being a professional. 
• Property owners – If you own property, whether commercial, residential or mixed should consider building insurance to protect your expensive investment. A broker can ensure you have the right level of cover for your needs. 
• Construction and trades – If you work in construction or a trade, you may have complex cover needs like cover for tools, workshops or more. A broker can help you find an insurer who can provide this for you. 
• Office based businesses  – If you're an office-based service business with staff and customers coming and going, a broker is a good option for an office insurance package. 
• Hybrid businesses – If you offer multiple services, like a garden centre with a cafe attached or a shop with perishable food items, a broker can help explain your options. 

Which business should consider going direct? 

This really depends on your own preference, but here are some suggestions: 

• Some sole traders – If you work on your own, with premises, minimal contact with people, and you only want public liability cover, then going direct to an insurer might be an option. But keep in mind, many brokers will still be able to help you. 
• Online businesses - If you're purely digital with no physical premises, stock, or liability exposure, a standard out of the box policy may work for you. Many insurers should be able to help you, but that doesn’t mean a broker won’t be able to. 

At Bionic, we can offer many types of business packages, including sole trader insurance, hairdresser insurance, handymen insurance as well as online business insurance and more. Start a quote online today. 

Still not sure? 

If you carry out a risk assessment for your business and you have a lot of risky scenarios, it may be a good idea to speak to a broker who can talk you through your options. Even better, speak to one who understands small and medium businesses, like us at Bionic. 

“Using a broker has its advantages – from a deep understanding of business risk to a choice of covers that are designed specifically for SME’s, a broker can help provide you with options that are right for your business” - Tara Mitchell, Insurance Technical Manager at Bionic. 

Who is the best for renewing my premium, a broker or insurer? 

Some insurers and brokers have simple renewal processes and carry out the renewal for you. 

Renewing through an insurer 

If you have previously gone directly to an insurer, it’s likely they will contact you to renew your premium. Obviously, this means you are tied to the same insurer, even if it’s not the cheapest or the right fit anymore. 

Renewing with a broker 

When you renew through a broker, they will often search their panel to see what quotes are available to you. Often, this means you have more choice when it comes to taking out a quote, so you might switch insurers. 

In some cases, a broker may find a better option on renewal - whether that’s based on premium pricing or the types of cover on offer.  

How do Bionic handle insurance renewals? 

When it comes to existing Bionic customers who have purchased online, where we can, we search our panel of insurance providers for the most competitive quote available, then email a renewal quote. But if a customer is happy with their current insurer, we can also just go ahead with a renewal. 

Any customers who speak to our brokers will receive a call from us to discuss their renewal. We’ll go through any changes over the phone, find the most competitive option available, and then once terms have been agreed, process the renewal. 

Bionic customers can opt out of being auto-renewed at any time by dropping us an email or giving us a call. 

How do I check if the broker I’m working with is legitimate? 

Brokers can get a bad reputation because of the poor practices of some, but not all work in the same way. That’s why it’s important to pick a reputable one. To sift out the genuine from the dodgy, check if they are legitimate. 

Check FCA registration 

Every broker must be registered with the FCA. Check the register before working with anyone. Look for disciplinary action, restrictions, or complaints. If they're not registered, consider carefully. 

Bionic Financial Services is registered with the FCA, and you can find us listed on their register. 

Is there a difference between an insurance broker and a price comparison website?  

Although they effectively do the same job, there are differences between some brokers and price comparison websites. 

• Insurance brokers work with insurers and customers to negotiate deals on insurance products. They use expertise and relationships with those suppliers to help get customers to get a better price. Brokers are paid via commission, which is usually taken from the provider. But some brokers will charge for their services, so always check before you use their services, and bear in mind you might be charged for the comparison even if you don't switch to them. 
• Price comparison websites are mainly used by non-commercial customers to switch car insurance, compare loans and credit cards, or get a new energy deal. In most cases, both the comparison and the switch are completed online with no need to speak to an expert. Most price comparison websites will also offer business services. The comparison is usually free, then suppliers will pay a commission to the price comparison website upon a switch being completed. 

What actually happens during a claim — will a broker really help or am I on my own? 

This entirely depends on the broker you use. 

Benefits of brokers that assist with claims 

Some brokers are really involved with the claims procedure and can assist through the whole process, they might: 

• Assist with the ‘first notification of the loss’ (often called FNOL) and report this to the insurer on your behalf 
• Work with insurers to get all questions answered 
• Help you as policy holder providing documentation 
• Chase up insurers if needed 

In this scenario, the insurer will rarely speak to you, and all communication will take place between the broker and insurer. 

Downsides of using a broker for claims 

Many brokers do offer a claims service. But there is a possibility that the process might take longer than going direct to an insurer as the broker essentially acts like the middleman in the chain, passing information back and forth between the customer and insurer.  

Brokers that don’t assist with claims 

When a customer calls up a broker that doesn’t deal with claims, the broker may ask for high level information on the claim for theirs records but they’ll pass the customer directly to their insurer’s claims team.  

Like the above, at Bionic, we don’t deal with claims, but we can provide you with your policy number and schedule with a contact number for your insurer. 

What about going direct to an insurer for claims? 

• Insurers deal with the day-to-day processing of claims, which could lead to a quicker resolution of claims. 
• An insurer can deal with any third parties and arrange help from a Loss Adjuster if needed. A Loss Adjuster investigates the claim and damages. 
• There aren’t any communications back and forth between a broker and insurer. 

Ultimately, there are pros and cons when choosing between a broker and an insurer. The pros of using a broker are not normally related to claims, but more down to the broad access they have to secure the right coverage for you in the first place. 

At Bionic, we do just that. Start a quote online to see your options. 

Is there a difference in how long claims take? 

Not necessarily, claim resolution time can be different due to the nature of the claim, not whether you contact your broker or insurer. 

How long do small claims take? 

It’s not uncommon for smaller claims to be handled over the phone or internet and not need much investigation, especially if the proper claims process is followed. For example: 

1. Someone damages your shop window 
2. You take photo and video evidence of the damages 
3. You board it up immediately 
4. Report it to the police with a crime reference number 
5. Obtain two or three quotes for repairs 

If you follow a similar process, your claim could be sorted quite quickly. If the insurer was happy with everything, payment could be made within a few weeks of notifying the insurer. Read our guide to the claims process. 

How long do larger claims take? 

The bigger and more complex the claim, the longer it can take due to investigations and, potentially, Loss Adjusters needing to get involved.  

Some liability claims can take months or even years to resolve depending on the circumstances and injuries that have happened.  

For example, if a customer makes an injury claim against you, lots of evidence on the injury may be needed from the claimant. And if there is a dispute, this can take a really long time. 

But this would be the case either way - whether you organised your insurance with a broker, or a direct with an insurer. 

Brokers can help with other business services 

If you’re running a small business, chances are, you need more than your insurance sorting.  

Some brokers may be able to help you with switching energy contracts, setting up broadband and VoIP services, taking out business loans and more. 

At Bionic, we can help with all the above. We’re the comparison site for your small business, helping to sort your business essentials, saving you time and money - with great deals too. 

Compare bionic business insurance and other essentials 

At Bionic our UK- based team can help you compare business insurance from a trusted panel of trusted insurers. Our comparison service is free, and you only pay when you take out a policy with us. Start a quote online now.

We can also help you find your next energy deal, upgrade your broadband and VoIP and help fix you up with a business loan.  

Want to understand more about insurance brokers, read up on our guides.