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Insurance explained
Choosing between a specialist broker and a large insurer is a decision about who designs, places and supports a mid-market insurance programme. It matters because the route shapes your market access, claims support and the cost of getting cover wrong.
Part of: Commercial insurance
In short
Mid-market businesses usually buy several lines of cover at once, such as property, liability, professional indemnity, D&O and cyber. Buying direct from one large insurer can be simple where that insurer has appetite for every line. A specialist broker acts for you, can approach several insurers, Lloyd's syndicates and specialist MGAs, helps you make a fair presentation under the Insurance Act 2015 and supports claims. Brokers are paid by commission, fees or both, and FCA rules let commercial customers ask for the commission amount. The right route depends on complexity, not size alone.
There are two broad routes for a mid-market business, typically one with tens of millions in turnover, a few hundred staff and several lines of cover. The first is to deal directly with a large insurer that writes most or all of the lines you need. The second is to appoint a broker who acts for you and places each part of the programme with whichever insurers suit it. Our guide to what an insurance broker is covers the broker's legal role in more detail.
In practice, many large commercial insurers trade mainly through brokers at this size, and their direct channels are usually aimed at smaller, more standard risks. So the real comparison is often between a specialist broker and a large national or global broker, or between a broker who spreads your programme across several markets and one who places everything with a single composite insurer. The broader trade-offs are set out in broker vs direct business insurance.
Whichever route you take, check the firm on the FCA Register. It shows whether a firm is authorised, what it may do and its trading names.
The table below compares the routes on the points mid-market buyers usually care about. These are general tendencies, not rules, and individual firms vary.
| Factor | Direct with one large insurer | Specialist broker |
|---|---|---|
| Who acts for you | The insurer's staff act for the insurer | The broker usually acts as your agent |
| Market access | That insurer's products and appetite only | Several insurers, and commonly Lloyd's and specialist MGAs |
| Programme design | Lines fitted to the insurer's standard wordings | Lines can be split between markets to suit each risk |
| Hard-to-place lines | May be declined or heavily restricted | Broker can look for specialist or excess capacity |
| Claims | Handled by the insurer that pays | Broker can present and push the claim on your behalf |
| Cost of advice | Built into the premium | Commission, fee or both, disclosed on request |
A single insurer can work well where every line is mainstream and the insurer is comfortable with all of them. The difficulty comes when one line, often professional indemnity, D&O or cyber, falls outside its appetite. Our page on broker vs insurer vs MGA explains who does what in that chain.
Mid-market programmes change during the year: acquisitions, new contracts asking for specific limits, new sites or overseas work. A broker typically handles mid-term changes, certificates and contractual insurance clauses. Ask any firm, broker or insurer, who your day-to-day contact will be and how quickly they commit to respond.
Under section 13A of the Insurance Act 2015, every insurance contract includes an implied term that the insurer will pay sums due within a reasonable time. A broker cannot change the policy wording at claim stage, but it can help notify correctly, assemble the evidence, challenge a coverage position it disagrees with and escalate. When you deal direct, the people assessing the claim work for the party paying it.
Specialist brokers commonly place business with company-market insurers, Lloyd's syndicates and managing general agents with niche appetite. That matters for higher limits, layered mid-market professional indemnity, or sectors that some insurers avoid.
If you have subsidiaries or contracts overseas, cover may need local policies, a UK master policy, or both, subject to local rules. See insurance when scaling internationally and group company programmes. Large global brokers have their own networks; specialist brokers often work with partner brokers abroad.
Brokers are usually paid commission by the insurer, a fee from the client, or a mix. FCA rules in ICOBS 4 require a broker to tell you the nature of its remuneration, and ICOBS 4.4 says an insurance intermediary must, on a commercial customer's request, promptly disclose the commission it receives, in cash terms and in writing or another durable medium. Our guide to broker fees and commissions goes further.
A direct insurer still has distribution and service costs; they are built into the premium rather than shown separately. So comparing a broker's commission with a direct quote is not a like-for-like test. Compare the total cost, the breadth of cover and the service you will actually get.
These examples are illustrative and not based on any client.
Buyers sometimes assume a large insurer or a large broker is automatically safer. Size can bring financial strength, networks and resources. It does not by itself mean your account gets senior attention or that the wording fits your risk. A specialist broker may know your sector's claims and exclusions better; a global broker may handle multinational programmes better. Our comparisons of specialist and generalist brokers and global and specialist brokers explore this.
Another misunderstanding is that a broker carries the duty of disclosure for you. Under section 3 of the Insurance Act 2015 the insured must make a fair presentation of the risk. A broker helps you do that well, but the duty stays with your business.
A third is that changing broker is disruptive. In practice, a new broker usually needs time before renewal to gather information, review wordings and approach markets, so the main constraint is timing. Starting three to four months before renewal commonly gives enough room for a proper review. Mid-term changes of broker are also possible, subject to the insurers' agreement to the new appointment, and existing policies normally continue until they expire.
Finally, some buyers treat the broker versus direct decision as permanent. Many mid-market firms review the question every few years, or when the business changes shape through acquisitions, new territories or a large contract. The route that suited a single-site business may not suit a group with several subsidiaries and overseas customers.
Our eight questions to ask any broker are a useful checklist. Apex is an independent broker that arranges commercial and professional indemnity programmes for mid-market firms; a broker reads every enquiry.
Not necessarily. A direct insurer's costs are built into its premium, while a broker is paid by commission, fee or both. For mid-market programmes the bigger cost drivers are usually the terms, limits and exclusions you end up with, and whether claims are paid smoothly. Compare total cost and cover, not just headline premium.
Some do for certain products, but many large commercial insurers trade mainly through brokers at mid-market size, keeping direct channels for smaller and more standard risks. Ask any insurer which lines it can offer you direct and how claims and changes would be handled.
Yes. Under the FCA's ICOBS 4.4 rules, an insurance intermediary must, on a commercial customer's request, promptly disclose the commission it receives in connection with the policy, in cash terms and in writing or another durable medium.
Usually, subject to the terms of your agreement with the broker. A broker can help you notify on time, assemble evidence, present the claim and challenge a coverage decision it disagrees with. It cannot override the policy wording, so getting the wording right at placement matters most.
Going direct can work where your risks are mainstream, you operate in one country and a single insurer has appetite for every line you need. It becomes harder when one line is specialist, limits are high or contracts set specific insurance requirements.
Tell us what your business does, your turnover and any claims. A broker reads every enquiry and comes back with options. No fee for a quote. Or call 0117 325 0027.
Start a commercial enquiry Request a callbackApex Insurance Brokers Limited is authorised and regulated by the Financial Conduct Authority. Registered in England and Wales, company number 07014570. This page is general information, not advice on your individual circumstances, and it does not guarantee that cover will be available or on what terms.
