New research reveals confusion among small businesses about what constitutes advice - and where they should go to obtain it.
The research found that SMEs who did not use brokers were confused about whether providers had searched the market and provided them with advice or information. The research also established that small businesses that do use insurance brokers put great value on the service they receive.
Of the micro SMEs not using a broker; 33% of SMEs did not understand that they weren't receiving advice and were probably only being offered a single product. Amongst both those who use a broker and those who do not, there is confusion as to where they can go to obtain advice; 63% of SMEs who did not use brokers said they received the service of identifying a suitable secure insurance policy and specialist advice when it is likely that a good proportion of them were mistaken. In spite of the apparent confusion, advice is highly valued with 96% of SMEs who used a broker stating that advice was important.
Eric Galbraith, BIBA's chief executive, said: "It is important that brokers play a key role in informing SMEs in what they do and how they can help them. This is even more important during the economic downturn when SMEs are likely to focus more on price. Brokers need to differentiate themselves from other providers by demonstrating the value that they add, both in terms of advising on cover and support in the event of a claim."