How it Works

Many firms seeking a professional indemnity quotation currently access the market by contacting their local broker. Their local broker may only have access to a limited number of markets or may not be a professional indemnity specialist and will pass the submission on to one of the major brokers. If the risk is successfully placed, they will then split the commission payable by the insurer, which is generally around 20%. This scenario does not always produce the best results because the major broker may only be interested in placing the business if it is economically viable for them. This isn't always the case especially if they are dealing with a relatively small premium that generates a 10% commission and in these circumstances they will look to place the business with one of their schemes. Broker schemes often offer brokers larger commissions but they may not suit every firm's risk profile. Restrictive scheme risk parameters can also prevent firms from obtaining a quotation or the required coverage.

Additionally, some brokers prefer specific insurers for placing business to maintain a high hit ratio and prevent the market from being flooded with the same submission. If insurers receive the same submission from multiple brokers or if they believe it has been sent to all participating insurers, they may not give it the attention they would give a submission on which they are more likely to obtain an order. 

Lastly not even the major brokers or professional indemnity insurance specialist brokers have access to all insurers in the market.