An Apex Insurance Brokers publication — 2026 Edition
We should say it up front. Apex is a broker. This guide is published by a broker, written by people who earn a living through broking, on a topic where the alternative to using a broker is buying direct. There is no version of this document in which we are a neutral observer.
What we can do — and what we have tried to do here — is write the analysis fairly. We will tell you, plainly, when buying direct is the right answer for a business. We will tell you what the principal direct insurers and aggregators are good at, because we believe most of them are good at something. We will then explain the cases where a broker pays for itself many times over, and the regulatory framework that governs what your broker owes you when you appoint one.
The test we set ourselves was this: if a friend ran a business and asked you, over a pint, whether they should bother with a broker, what would you actually say? This guide is written in that voice. It is not a sales pitch. The closing of this document is not an attempt to push you towards us; it is an honest acknowledgement that a small minority of SMEs are genuinely better served buying direct, and we will say so if that turns out to be you when we look at your specific risk.
— The team at Apex Insurance Brokers, Bristol
Why this chapter matters. Before you can decide between a broker and direct, you need to be clear about what “direct” actually means — and the three routes are not all the same animal.
This is the cleanest case. You go to an insurer’s website, fill in an application, get a price, and bind a policy. The insurer carries the risk, services the policy, and handles claims. There is no intermediary, no broker fee and no commission visible on your paperwork (though commission may still sit inside the price — see Chapter 6).
In the UK SME market, the most visible direct insurers include Direct Line for Business and Hiscox Direct. AXA, Aviva and Allianz historically lean broker-distributed but have direct propositions on certain lines, principally tradesman public liability, micro-business package and small landlord cover. NFU Mutual sells direct to its agricultural and rural-business base. Specialist direct propositions exist for taxi, courier, motor trade and farm in pockets of the market.
An aggregator gathers quotes from multiple sources and presents them in a list, ranked usually by price. In the SME space, the principal aggregators are Compare the Market Business, MoneySupermarket Business, GoCompare Business and Confused.com for the smaller end. They are not insurers; they are panels that connect you to insurers and to brokers (some panels include brokers acting as MGAs). The customer relationship after the sale typically reverts to whichever insurer or broker actually took the business — not to the aggregator.
Simply Business is the most visible example: technically a broker, regulated by the FCA as a broker, but operating an online-first journey that feels closer to an aggregator than to a traditional broker. The customer does most of the buying online, with broker support available for the cases that need it. Premium Choice, Constant Insurance and Coversure operate similar models in different niches. Hiscox sells both direct and through brokers, depending on the route the customer enters.
A broker is your representative in the market. You provide the firm’s information; the broker prepares a presentation, approaches insurers (sometimes many, sometimes a defined shortlist), negotiates terms, presents you with options and a recommendation, places the cover and supports you through claims. Brokers are paid either by commission from the insurer (built into the premium) or by fee from you (with commission rebated, where applicable), or by a combination.
[Broker’s view sidebar — “When SME owners say they bought ‘direct’, they often mean they bought through Simply Business or an aggregator. Technically that is still a broker channel — just a different broker model from us. Be clear which route you actually took, because the rights, the regulatory framework and the support model are different.”]
[Common mistake call-out — “Assuming the aggregator is the insurer. Aggregators are introducers. The insurer carrying your risk and the firm handling your claim may not be the firm on the homepage you bought through. Read your schedule and your statement of demands and needs.”]
Why this chapter matters. Some businesses are well-served by a direct or aggregator route, and we are not going to pretend otherwise.
There is a category of SME for which a broker adds limited value. Recognising it honestly is the first piece of credibility this guide has to earn.
The businesses for which buying direct is generally a reasonable choice tend to have most or all of the following features.
The risk is simple and singular. A self-employed plumber with one van and no employees. A high-street florist with one shop and a leasehold. A jobbing photographer with a public liability requirement. The proposal form on the insurer’s website maps neatly onto the business; there is no awkward question that demands explanation.
The off-the-shelf package fits. The insurer’s tradesman policy, retail package or office-combined product does, broadly, what you need. You are not asking for a bespoke combination of cover lines or unusual sub-limits.
There has been no material change. You have held the same cover for several years, with the same insurer, with no claims and no material change in trading. The risk has not grown sideways into new activities, new sites, new product lines or new contracts that would change underwriters’ view of it.
Price is the only material driver. You genuinely do not value access to claims advocacy, wording comparison, market testing or a relationship with the broker. You want the cheapest compliant cover for a known commodity risk, and you are happy to manage any future claim yourself.
The cover is mandatory but commoditised. Public liability, Employers’ Liability for a sole trader and one part-timer, single-vehicle motor — these are well-mapped, well-priced commodity lines.
In fairness, the direct insurers and aggregators have built genuinely capable propositions for this segment.
Direct Line for Business has a strong digital journey, a recognisable brand and a service infrastructure built for volume. Hiscox Direct has built one of the better digital products for professional services micro-businesses — consultants, designers, IT contractors — offering decent professional indemnity and cyber covers without a broker in the loop. Simply Business has scale, a panel of insurers and a digital journey designed for tradespeople and small landlords. NFU Mutual remains a strong direct option for farming and rural risks.
The aggregators are a price-discovery tool. For a business that knows exactly what it wants and is genuinely buying a commodity product, the aggregator can save real money by surfacing competitive quotes you would otherwise miss.
[Diagram: a labelled grid showing the principal UK direct and aggregator routes and what each typically sells well.]
If you are a one-van trade, one-shop retailer or a freelance consultant with a stable risk profile, and price is your dominant concern, the direct or aggregator route can work. We are not going to pretend otherwise. Some of our own previous clients have moved to direct platforms when their risk simplified, and we did not try to stop them.
[Broker’s view sidebar — “A test: if you can answer your renewal questionnaire in fifteen minutes without referring to a colleague, a contract or a list of recent jobs, and you have not had a claim in five years, the case for direct is plausible. If any one of those conditions fails, you are probably in broker territory.”]
Why this chapter matters. The broker case is not “broker is always better”. It is “broker is better when one or more of these specific conditions apply.”
There is a different category of SME — much larger than most direct insurers will admit — for which the broker route is the right one. Not because brokers are inherently virtuous, but because the risk has features that the direct journey is not built to handle.
Most growing SMEs end up needing more than one type of cover, and the gaps between policies are where claims fall. A construction consultancy needs Contractors’ All Risks, Professional Indemnity, Public Liability and increasingly Cyber. A manufacturer needs Property, Business Interruption, Product Liability and Goods in Transit. An education provider needs PI, Public Liability, Abuse cover, Property and Business Interruption with a tailored indemnity period.
The direct insurer can usually quote one of these. They are not built to design the package across all of them and to make sure the lines join up. Brokers are.
If your sector has Minimum Terms and Conditions imposed by a regulator, you are not buying a commoditised product. You are buying a cover that must meet a precise specification.
Direct insurers very rarely write regulator-prescribed PI for these professions. Where they do, the cover is often a stripped variant and the wording quirks can leave gaps.
There are sectors where claims happen rarely, but when they happen they are bitter, slow and large. Industrial deafness claims, abuse claims against schools and care providers, contractual liabilities under construction contracts, complex business interruption claims, late-presenting product liability claims, latent defect property claims. In these matters, having a broker advocating for your interests against the insurer — pressing for reservation-of-rights letters to be lifted, challenging aggregation positions, escalating slow handlers — is real money.
The direct insurer’s claims team works for the insurer. They are usually decent, professional and reasonable. They are not your representative. When the indemnity position is finely balanced, the difference between having an advocate and not having one is material.
Some risks are difficult to place, full stop. Late-night venues. Taxi and private hire fleets with criminal-conviction drivers. Motor trade with high-value stock. Cyber for healthcare technology. Property and business interruption for premises with flat felt roofs or remote rural locations. Manufacturing with overseas product exports. Heritage hospitality with timber-framed listed buildings.
These risks need access to specialist markets — Lloyd’s syndicates, MGAs, Bermuda and London markets, or specific niche carriers. The direct route is not a route to these markets. A broker is.
Two policies with the same headline price can have materially different cover. Defence costs inside or in addition to limit. Single claim or aggregate limit. Sub-limits on the things you actually do. Endorsements that exclude work you do. Retroactive date drift. Indemnity period on business interruption. Replacement basis on property — new for old, indemnity, or day-one uplift.
The direct journey is designed to make the buying decision feel simple. It does so by hiding most of the levers that brokers spend their careers pulling. If the wording matters to you — and in most non-trivial SME risks, it does — you need someone whose job is reading wordings.
[Common mistake call-out — “Treating the broker conversation as a price exercise. Brokers do not control insurer pricing materially. They control presentation quality, market access, wording, claims advocacy and your renewal cycle. The 5% you might save by going direct in year one can be undone many times over by one claim adjustment that nobody negotiated for you.”]
[Broker’s view sidebar — “We tell every prospect the same thing: if your risk really is simple, you will not benefit much from us. If it is not, the broker is the cheap part of the equation. Our worry is the businesses that think their risk is simple when it is not — the consultancy that has quietly added a US client, the contractor whose biggest job is now £4 million when it used to be £400,000, the shop that now also runs a website with stock fulfilment from a third site.”]
Why this chapter matters. The rules that protect you are different depending on the route you took. If you do not know which rules apply, you cannot tell whether they are being followed.
The Insurance Conduct of Business Sourcebook (ICOBS) is the part of the FCA Handbook that governs the sale of non-investment insurance contracts. Two of its sections matter most for the broker-vs-direct decision.
ICOBS 5.2 — assessment of demands and needs. Every insurance sale, whether by a broker or by a direct insurer, must be preceded by an assessment of your demands and needs. You should receive a “statement of demands and needs” that records what cover is being offered against what you have asked for.
ICOBS 5.3 — personal recommendation versus information only. If a broker (or direct insurer’s sales agent) gives you a personal recommendation, they are telling you that a specific product is suitable for you having considered your circumstances. They must have a reasonable basis for the recommendation, and they carry liability if the recommendation is wrong. If they are operating on a non-advised (information only) basis, they are setting out products and you are choosing — they do not certify suitability.
Most direct insurer journeys operate on a non-advised basis. Most aggregator journeys also do. Brokers vary — some provide personal recommendations as standard, some operate “information only” for simple risks. Ask which you are getting; the answer must be on your documentation.
PROD 4 in the FCA Handbook sets out product governance rules for insurance distributors. The headline duty is that the distributor must identify a target market for each product and only distribute the product to customers in that target market. This is one of the duties behind the increasing rigour around proposal forms — insurers and brokers want to be able to show that the product was sold to a customer it was designed for.
Since 31 July 2023, the FCA’s Consumer Duty (Principle 12, supplemented by PRIN 2A) has required firms to deliver “good outcomes” for retail customers. The duty has four “outcomes”: fair value, products and services, consumer understanding, and consumer support.
For SMEs, the most important question is whether you count as a “retail customer” under the duty. The general rule is that micro-enterprises (broadly, fewer than ten staff and turnover under €2 million) are treated as retail customers. Larger SMEs may be commercial customers, depending on the cover, the contract and the regulated activity. The boundaries are not always sharp; if your turnover is under €2 million and you have ten or fewer employees, assume you are inside.
If you are inside, your broker and insurer both owe you the duty’s outcomes — including the fair value obligation, which has driven a meaningful clean-up of pricing practices since 2023.
Under PROD 4, brokers must consider whether the products they distribute, including any fees and commissions, offer fair value. This is one of the regulatory pillars behind commission disclosure questions (see Chapter 6). It also disciplines the broker’s product selection — if a product does not offer fair value, the broker should not distribute it.
If you have a complaint against a broker or an insurer that you cannot resolve through the firm’s own complaints process, you may be able to escalate to the Financial Ombudsman Service. To be an eligible complainant as an SME, you must currently meet all of:
These limits are set by the Dispute Resolution sourcebook (DISP) in the FCA Handbook and have been broadened over the years to capture more SMEs. The Ombudsman is free to you, makes binding decisions up to a defined limit, and is one of the most underused tools in SME insurance.
The Insurance Act 2015 imposes a duty of “fair presentation of the risk” on all non-consumer insureds. You must disclose every material circumstance you know, or ought to know, before the contract is entered into. You must do so in a manner that would be reasonably clear and accessible to a prudent underwriter.
This duty applies whether you buy direct or through a broker. The practical difference is that a broker can help you discharge it — by asking the questions, identifying the gaps, and shaping the presentation. Section 4(6) of the Act extends the duty to information that your “senior management” or those involved in arranging the insurance “ought to know” — a reminder that the disclosure is not just what you happen to remember, but what a reasonable enquiry of your own people would have surfaced.
[Broker’s view sidebar — “We have seen direct policies challenged at claim time on disclosure grounds because the insured ticked a box online without thinking about the question behind it. Disclosure is the place where the route matters most — a broker who is asking you the right questions, and noting your answers, is your evidence that fair presentation was made.”]
Why this chapter matters. “Broker” covers a wide range of service levels. The regulatory minimum is one thing; what good looks like is another.
Under the Insurance Distribution Directive (transposed into the FCA Handbook), every broker owes you, in writing, before the contract is concluded:
You are entitled to ask for the specific commission percentage on your policy and on any related policies the broker has placed for you. A confident broker tells you without hesitation.
The regulatory minimum is the floor. Beyond it, here is what a properly serviced broker relationship should deliver in the first twelve months.
A proper initial review. Not a fifteen-minute call. A full conversation that captures the business, the work mix, the contracts, the recent claims, the upcoming changes, the staffing, the premises, the M&A pipeline if any. From that, a recorded scope of work — what you have asked the broker to do.
A market test on placement. Defined and explicit — you should know which insurers are being approached and why, and which are not. A blanket approach to “the market” is not strategy.
A wording-comparison document. Where two or more quotes are seriously in contention, the broker should produce a comparison covering limit, excess, defence-cost basis, retroactive date, key endorsements, sub-limits and price. You should be able to read it in twenty minutes and decide.
A binding pack. The signed proposal, the schedule, the wording, the certificates, the statement of demands and needs, the IDD disclosures, the fair-presentation declaration. All in one file.
A mid-term-adjustment process. When something changes — new vehicle, new site, new employee, new contract requirement — the broker should have a simple, time-bound MTA process. Days, not weeks.
A renewal cycle that starts early. The broker should be re-engaging you 90 days before renewal with a fresh review and a renewal strategy. Late starts produce late quotes, late quotes produce poor decisions.
Claims advocacy. If you have a claim or a circumstance, the broker is your representative, not the insurer’s. They should be on the call with you, pressing for resolution, helping you understand what is being offered and what is being asked.
[Diagram: ‘Broker-relationship checklist’ — a one-page year-one expectation sheet covering the items above.]
There are warning signs that an existing broker relationship has stopped delivering value. Any one of these is a reason to look around.
Fee creep without service uplift. Fees rise, but the underlying service does not change. Ask what has changed and whether it justifies the increase.
Commission opacity. The broker is evasive about how they are paid on your account, what the commission percentage is, or whether any contingent or override arrangements with insurers might influence the recommendation.
No market test in three or more years. You have been with the same insurer, on broadly the same wording, for three renewals or more, without any explicit market testing exercise. The insurer is not necessarily wrong; the absence of any testing is.
MTAs that take a fortnight. A simple mid-term adjustment — a new vehicle, a new employee, a small premises addition — should be turned around in days. If it routinely takes a fortnight, something in the broker’s service model is broken.
Claims left at the insurer’s mercy. A claim arises and the broker effectively hands you to the insurer’s claims handler and steps back. You should not feel alone in a claim conversation. If you do, the broker is failing the most important part of their role.
[Common mistake call-out — “Switching broker on price alone. The cost-saving from a broker change is rarely material year one. The value at stake is the service model — renewal discipline, market testing, claims advocacy. Switch for service, not for headline cost.”]
Why this chapter matters. How the broker is paid shapes the incentives. You are entitled to know how, and to a defensible answer when you ask why.
Two principal models exist, with hybrids in between.
Commission. The broker takes a percentage of the premium, paid by the insurer out of the premium you pay. Standard commission rates in the UK SME market typically sit between 15% and 30% of net premium, depending on the line, the insurer and the broker’s market position. The commission is built into the price you see; it is not an extra.
Fee. The broker charges you a fee for service, and any commission that would have been paid by the insurer is either rebated to you or transparently set against the fee. Fee arrangements are formalised under a Terms of Business Agreement and, ideally, a Service Level document that sets out what you are paying for. Fee-based broking is more common in mid-market and complex SME placement than in micro-business.
Hybrid. A reduced commission plus a smaller fee for advisory or claims work outside normal placement. This is the most common arrangement on substantial SME accounts.
You can ask, and the broker must tell you in writing:
A broker who tells you these clearly, without hedging, is a broker working in the open.
PROD 4 requires brokers to consider whether the total cost of the product to the customer — including commissions and fees — represents fair value. This is not a minimum-price obligation; it is a value-for-money discipline. A broker selling a stripped-down product at full price, with a high commission and limited service, may struggle to justify the value of the placement.
For the customer, the practical implication is that you should be able to articulate what you are paying the broker for. If the broker cannot answer that question clearly, neither can you.
[Broker’s view sidebar — “We are not embarrassed by commission. It is how most broking is paid and it works. What we are firm about is disclosure — every client should know, on every account, the percentage of premium that comes to us. If a broker is reluctant to tell you, that is a signal.”]
Why this chapter matters. The distribution landscape is changing. Where the broker fits in five years’ time looks different from today.
Embedded insurance — cover sold inside another transaction, often through a non-insurance brand — is one of the most discussed shifts in SME distribution. Direct Line Group’s DRWAC platform, the partnerships between insurers and high-street brands, the embedded SME cover offered with accounting software (Xero, FreeAgent), and the partnerships between SaaS platforms and Hiscox, Superscript and others, all point in the same direction. The point of sale is moving away from the insurance journey and into adjacent platforms.
For commodity micro-SME risks, this is probably a good thing. It lowers friction, raises the take-up of cover that ought to be held, and lets the buying happen at the point the cover is needed. For more complex risks, the embedded route is unlikely to displace the broker in the next several years — the risk-shaping work is not what these platforms do.
The London market — Lloyd’s of London, the Bermuda market, the major reinsurance hubs — remains the deepest pool of underwriting capacity for non-standard SME risks. Access to this market goes through brokers, through wholesale brokers, through coverholders and through MGAs. The direct route does not reach it.
For a hospitality business with unusual fire exposure, an exporter with US distributor liability, a manufacturer with novel product risk, a tech firm with high-value data assets — the right cover is often in the London market. A broker who knows the wholesale routes is the access point.
Managing General Agents and coverholders are entities authorised by an insurer to underwrite on the insurer’s behalf in a defined niche. Many of the most innovative SME products in the last five years — particularly in cyber, professional indemnity, late-night, taxi, and motor trade — have come from MGAs rather than from mainline insurers’ own underwriters. Brokers are the principal route to MGAs.
Most insurers are accelerating their use of machine-learning models in underwriting and claims. The trade-off is that pricing and decision-making becomes both faster and less explainable. Where an underwriter five years ago could explain in plain English why a risk was being loaded, the answer today is increasingly “the model returned this score”. The customer’s recourse against an opaque decision is harder than it used to be — and this is where broker advocacy becomes more valuable, not less.
A broker who has a relationship with the underwriter behind the model can challenge a result, request a referral, push for human review, and surface information that the model did not weight properly. The direct journey has none of these levers.
[Broker’s view sidebar — “The interesting question is not ‘will brokers exist in ten years’ time’. They will. The interesting question is what brokers will be doing. Our bet is more wording work, more claims advocacy, more risk-management partnership, and less commodity quotation. The pure quote-comparison broker is the one under pressure, not the relationship-and-advocacy broker.”]
We started this guide by saying we have an angle. We are a broker. We make our living from this question coming out a particular way.
But the honest answer is that we do not think the question is as one-sided as a broker’s interests would suggest. There is a real category of UK SME — the single-vehicle, single-shop, single-trade, stable, claim-free, simple-risk business — for whom buying direct or through an aggregator is a reasonable choice. We have told some of these businesses, sitting opposite us, that we did not think they needed us. The conversations were short, friendly and they bought direct.
What we are firmer about is the category that thinks it is simple but is not. The consultancy that picked up a US client without thinking about jurisdiction. The contractor whose typical job has doubled in value. The retailer who quietly started selling online to consumers. The hospitality business that added a function suite with a late licence. The professional firm whose minimum-terms regulator changed the cover requirement last year. For these businesses, buying direct is buying a policy that no longer matches the risk.
The right test is not “broker or direct” in the abstract. It is: does the route I am buying through actually understand the business I now run? If the direct insurer’s online journey lets you describe your business accurately and the resulting cover fits — fine. If it does not — if there is a complexity, a regulator, a contract chain, a claims history, a market-access need — then a broker pays for itself. Probably many times over.
If you would like a second opinion on whether your current route still fits your business, that conversation is on us. We will look at what you have, we will say honestly whether it is working, and we will tell you if direct is the right answer for you. No fee for the conversation; no obligation.
Apex Insurance Brokers Ltd is a UK insurance broker, Bristol-based. We work with commercial clients across England and Wales — professional services, construction, manufacturing, hospitality, retail, motor trade, education, charities and landlords. We are an independent firm and have been authorised by the Financial Conduct Authority since 2014.
Contact us: - Telephone: 0117 325 0027 - Email: info@apexinsurancebrokers.co.uk - Web: apexinsurancebrokers.co.uk
Trading address: QCS, 53 Queen Charlotte Street, Bristol BS1 4HQ Registered office: c/o Westcan, 5 Anglo Office Park, Bristol BS15 1NT
General guidance only — not regulated advice. Always consult your broker on your specific cover and circumstances. Apex Insurance Brokers Limited, FCA FRN 724952, Companies House 07014570.
This guide is published by Apex Insurance Brokers Ltd, authorised and regulated by the Financial Conduct Authority. You can verify our regulatory status on the FCA register at register.fca.org.uk.
This guide is general information based on our experience as an insurance broker. It is not legal, regulatory or compliance advice, and it is not a personal recommendation as to any specific insurance product or route to market. Any decision about how to buy insurance should be taken having regard to your firm’s individual circumstances and, where appropriate, advice from your own legal, compliance and risk advisors. References to third-party insurers, aggregators and platforms are illustrative of the UK market landscape and do not imply endorsement, criticism or recommendation. We do not undertake to update this guide to reflect changes in regulation, market practice or law after the version date above.
Apex Insurance Brokers Ltd accepts no liability for any loss arising from reliance on the contents of this guide.
Reviewed by Matt Bartlett, Director.
Last reviewed: May 2026
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Apex Insurance Brokers serves UK professional services firms and commercial businesses. Call 0117 325 0027, email hello@apexinsurancebrokers.co.uk, or request a quotation.
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