OcTOBA – Time to make your broker work for you
In a hard market, competition among insurance providers reduces, often resulting in reduced capacity in most insurance lines and a reduced appetite for negotiating terms of coverage.
In this context, companies’ reliance on brokers is increased as prices go up and coverage is cut down.
Unfortunately, with the current economic outlook marked by a series of highly disruptive events, including a financial crisis, Brexit, a global pandemic, recession and the climate change crisis, this is unlikely to improve anytime soon.
There has never been a more important time to review the ‘TOBA’ contract under which your broker works.
A less-discussed consequence of the insurance hard market is the increase in claims being disputed or adjusted more aggressively by insurers. Consequently, companies are more reliant than ever on the small prints of policies placed and the support of the broker to resolve any issues that arise.
This means there has never been a more important time to review the Broker Terms of Business Agreement (TOBA) contract under which your broker works, whether or not you intend to tender their mandate, and ensure both your broker and policies will work for you in the event of a claim.
TOBA check list
- Is your broker taking responsibility for checking that your insurance wordings are fit for purpose?
- Does your broker have a duty to advise you on your required disclosure as outlined in the requirements of the Insurance Act 2015?
- Does your TOBA require proactive disclosure of the broker’s remuneration for your specific placement? Do you know how much your broker is getting paid by both you and insurers?
- Does your broker have a reasonable liability cap in the event of a policy failing to respond as intended?
- Have you established KPIs with your broker? Do they issue your insurance documents on time?
If the answer to any of these questions is no, we can help you review your TOBA and ensure you are getting the best service and value from your broker.