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How Insurances are arranged
When a person or a company has a loss exposure, one of the way that they can most cost-effectively protect themselves from the financial and other effects of that exposure is to purchase Insurance from a reputable company. in exchange for a relatively small payment (the premium), an Insurer issues a contract of Insurance (the Insurance Policy) which binds the Insurer to pay (or 'indemnify') the policyholder for specified fortuitous losses up to the agreed amount.
Persons seeking such policies can either approach an Insurer directly and do their own negotiations, use an Agent (a representative of the Insurer), or opt for a Broker, who is a professional and independent Insurance advisor. The pricing for that policy to the Insured should not vary between the three, however the objectivity of a Broker and his knowledge of the market works to the benefit of the Insured, who, instead of taking matters into his own (possibly inexperienced) hands, will instead have a knowledgable and experienced person negotiating on his behalf.

Brokers understand the market and are familiar with the subtle but important variances between each Insurers' policies. In addition, it is in a Broker's interests to seek the very best terms on behalf of a client, and in doing so, they earn a commission from the Insurers from the business placed with them. As it is not permitted for Insurers or Agents to discount commissions to clients directly, by using a Broker the policyholder enjoys all of the benefits of having his own experienced administrator of his Insurance programme at no cost to himself!
Brokers are obligated to treat their clients' information with absolute confidentiality. Once your Broker is fully informed of your particular exposures and your needs, he or she will chose an appropriate policy for you and will approach a range of Insurers to negotiate the scope of cover, the pricing that will be charged and other details such as excesses (deductibles), discounts for risk improvements and the like.
In the event of a claim, your Broker will guide you through the claims process, will administer your claim and will work hard to get the matter settled fairly and in a reasonable period of time. Perhaps more than in any other area, the handling of a claim is where the policyholder benefits most from having an experienced and knowledgeable advocate working hard to get the claim settled.
From time to time during the policy year, your Broker is available to answer any questions you may have in regard to your evolving exposures, to advise on any changes needed to your Insurance Programme, and to keep you abreast of new developments in the Market. As your policy renewal date approaches, your Broker will confer with you to ensure the adequacy of Sums Insureds, arrange for independent valuations of your assets if this is needed, and will revisit Insurers to ensure that your cover is properly placed before the expiry of your policy.

Managing risk can be an extremely complex task, and choosing your Broker is probably the single most important part of purchasing Insurance, as it could mean the difference between a covered loss and an uncovered one. There is no hard and fast rule on how to choose your Insurance Broker, but an excellent start is to ask your circle of friends and business partners for their experiences with their own Brokers. The majority of Brokers can handle both individual and corporate clients, and several local Brokers specialise in particular areas. After listening to personal recommendations, you could then seek the advice of your local Chamber of Commerce, and of course you could take a few minutes to call some of the Companies that have been recommended to you to, simply have a quick chat which will allow you to get a feel for how that particular Broker operates.
Whichever means you use to chose your Broker, you should always remember that they will be working for you, and the only way that you can be assured of getting the best out of your Insurance programme is to make sure that they are kept fully informed of everything to do with the Insurances they are arranging for you - Insurance is based on the principal of Utmost Good Faith, and your Broker can only do his or her best if they know all of the facts about the risks you are asking them to arrange Insurance for!
 


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