Broker vs direct: an honest answer from a firm with an obvious interest

When buying direct is genuinely fine

Let us start with the case against ourselves. A sole-trader consultant with no employees, a standard trade with a clean claims history, a small shop that matches the online question set exactly — these risks are what direct and online products are built for, and they are often served well by them. The covers are standardised, the sums are modest, the questions fit, and the premium reflects a lean distribution chain. If that is your business, a direct policy bought carefully is a perfectly rational choice, and any broker who tells you otherwise is selling, not advising.

“Bought carefully” is doing some work in that sentence, though. Direct products are sold without advice: you choose the cover, you answer the questions, and the responsibility for describing the risk fairly sits with you. For a genuinely simple business that is a light burden. It gets heavier fast.

Where a broker starts to earn their keep

When your risk doesn’t fit the boxes

Online question sets are compressed by design. A claims record, a non-standard trade or premises, work that spans two categories, a previous policy declined or cancelled — any of these can push you outside what the product was built for. Answer loosely and you risk the policy; answer strictly and the system may simply refuse. A broker’s job at that point is to present the risk properly — context, mitigation, the full story — to insurers who can actually consider it.

When covers need to interact

A business with property, business interruption, liability and perhaps professional indemnity is not buying four products; it is buying one recovery. The sums, definitions and triggers need to line up — an indemnity period that matches the rebuild, liability that doesn’t exclude the actual work, no gap between where one policy ends and the next begins. That co-ordination is advice work, and it is where package-by-question-set buying most often goes quietly wrong.

When the sums get larger

As values and turnover grow, so does the cost of a mis-described risk — underinsurance penalties, disputed claims, conditions never noticed. The fair presentation duty under the Insurance Act 2015 sits on the insured; a broker’s professional job is helping you discharge it properly.

When the claim comes

This is the part that is hard to see from the price. When a serious claim runs into difficulty — a reservation of rights, a disputed condition, a low offer — a direct customer negotiates with the insurer alone. A broker acts as your advocate: preparing the claim, arguing the wording, escalating when needed. Claims advocacy is, in our experience, where clients most often decide the relationship paid for itself.

How brokers are paid — plainly

Brokers are mostly paid by commission: a percentage of the premium, paid by the insurer, already included in the price you are quoted. Some work is done for a fee instead, or as well — and any fee should be agreed with you before you commit. You are entitled to ask any broker what commission they earn on your policy, and a decent one will tell you. That is our basis too: commission, disclosed on request, and any fee agreed before you commit. If a broker is evasive about money, take the hint.

The test

Strip the marketing away and the choice comes down to one question: could you present your own risk to an insurer, completely and confidently, and handle the conversation if a claim went wrong? For some businesses the honest answer is yes — buy direct with our blessing. For many, the honest answer is no, or not any more — the business has grown past the question set. That is the point at which a conversation with a broker stops being a sales pitch and starts being cheap insurance in its own right.

Frequently asked questions

Is business insurance cheaper direct than through a broker?

Not reliably in either direction. Direct products can be keenly priced for simple, standard risks. Brokers have access to markets and terms that are not sold direct, and on more complex risks the broker-arranged programme is often better value once cover differences are counted. Compare the cover and the total cost together, not the headline premium alone.

Do I pay extra to use a broker?

Usually the broker’s commission is paid by the insurer out of the premium quoted — you do not normally pay a separate charge unless a fee is agreed, and a fee should always be agreed with you before you commit. You are entitled to ask what commission a broker earns on your policy.

When is buying online genuinely the right choice?

When the business is small, standard and simple: a clean claims history, a trade the question set describes exactly, modest sums insured and no unusual activities. Those risks are what direct products are built for, and they are often served perfectly well by them.

What does a broker actually do at claim time?

Acts as your advocate: helps prepare and present the claim, argues the policy wording where the insurer’s reading is challengeable, and escalates when an offer or a delay is unreasonable. A direct customer does all of that alone. It is the least visible part of the service when buying, and often the most valuable part later.

What is the ‘fair presentation’ duty?

Under the Insurance Act 2015, a business buying insurance must make a fair presentation of the risk — disclosing what it knows or ought to know about matters an insurer would consider material, in a reasonably clear and accessible way. Helping clients discharge that duty properly is a core part of what a commercial broker is for.

Apex Insurance Brokers Limited is authorised and regulated by the Financial Conduct Authority (FRN 724952). This page is general information, not advice on a specific policy.