Company insurance problems

[MattyA]

Hi all,

Just wondered if anyone has experience in commercial insurance ?

I have come across an issue whereby our ex FD who has apparently entered into a five year agreement with our broker to give them exclusive rights to provide our insurance cover.

This came to light when I decided to contact a couple of brokers for alternative quotes.

The broker who informed me of this was stunned as he had never heard of such an arrangement, as were the insurers allegedly involved / tied into the same agreement.

Anyone else ever heard of such a thing?

It involves, Fleet,EL,PL,PI and contractors all risk and adds up to a few bob.

It is just two signatures on the brokers letter head with no T's & C's etc which I believe isn't enforceable although the broker believes it is.

The second point is the broker gets a broking fee, all above board and agreed, in lieu of commissions from the insurers.

My suspicions are now raised that they are having it both ways due to :

1: His long term 'agreement' and his close guarding of the same
&
2: The 1st alternative quote I have recieved is considerably cheaper than the premiums at the last renewal (Before his broking fee)

Question is can I find out what commissions have been paid by the insurers to the broker?

It should all be very transparent due to the broking fee but it appears anything but.

All help / pointers would be greatly appreciated.

Regards,

Matty

[MattyA]

Re: Company insurance problems

I guess not.

Hey ho - I will fight em' anyway.

Will give FSA a call and see what they think.

Matty

[garlok]

Re: Company insurance problems

Hi Matty,

Sorry I didn't pick this up earlier. It sounds definitely irregular and under hand to me. There is a member here mfgboy who allegedly works in the insurance industry and I am surprised he has not been along, hence the feeling that this is definitely dodgy.

In our business we had a broker/financial advisor looking after all of our insurance needs and our personal stuff as well. What a bunch of wasters they proved to be as well. Just about everything they did for us fell apart. I seem to remember that there was some new regulation brought in whereby borkers had to declare to the customer what income they were deriving from the business the customers is providing them with. We took the stance when the premiums started to go up each year that they had to get the quoted premium down by 20% minimum or they would lose the business. Eventually of course they got the message and falsely over inflated the quotes, but we just moved the business bit at a time. Example on policy we had for public liability with AXA through this broker rose by over 120% in 3 years. We just told him that we were going elsewhere, any arrangements he thought he had with our business were now null and void as he was unable to provide a service or product to the specifications we had laid down. He decided not to take us on but we have had to keep the company van insurance with him as the company AVIVA will not talk to us direct only through the broker. Sadly that is one item that I cannot a better deal on it elsewhere. However everything else has been moved personal and business. Fortunately we are at the end of our business life and it will all get wound down completely in the next year. By the way the best deal on 3rd party liability we got was from the National Market Traders Federation, the remainder were at least double their figures.

regards
G

[MattyA]

Re: Company insurance problems

Thanks Garlock & good luck with the winding down!

I did post a reply to this on Saturday morning but seems to have gone astray during the website upgrade.

Never minf, I have to do something tomorrow as the cover runs out at midnight.....have decided to change broker , despite the threat of legal action from the current broker as it will save us money and allow me to break away from the one sided arrangement that has gone on for the last 10 years.
During this time our premiums have averaged £73K ....after a prod from me and the knowledge that another broker was chasing the business prompted revised premiums and a saving of £25K.
Job done & time to move on.

Thanks,

Matty.

[MattyA]

Re: Company insurance problems

Ahh well had to do something so went with the new broker who came up with the best price.

Old broker none too happy and has sent me a bill for £26K for fees he believes are due under the '5 year agreement' which had 4 years left to run.

Bring it on my friend, I will expose him for the conman he is.

FCA already contacted.

Matty