If you have a business insurance renewal that is due, and you are doing the sensible thing and looking around for alternative quotes, you may find there are a few different options available to you.
If you are paying over a few thousand pounds a year, it may be that an alternative broker cannot get a reduced price on your existing insurers renewal. Or, more importantly they cannot get you better cover.
However, the broker may offer you a better price option, by continuing to keep the policy going with your existing commercial insurance company, but with you changing the broker you deal with.
Most brokers earn a commission from the premium you pay. For example, if you premium is £3,000 plus 5% insurance premium tax, the broker will earn around 20% of the £3,000. As with all types of financial service, getting new customers is five times more expensive than keeping an existing one. So, the new broker can afford to reduce their commission a bit, to get you as a new customer.
In these situations, they will ask you to complete a “transfer mandate”. This is a letter, which you must complete on your own letterhead, prior to the expiry of your existing policy. It effectively says that you are happy for Broker B to deal with your insurances, compared to Broker A who used to do this.
You do need to check that you get exactly the same terms and conditions and importantly payment method. There is no point in moving from one broker that allows interest free instalments to another one that charges 5%. It can be a good way to save yourself 5 or 10% of your annual insurance costs.