Business insurance misselling risk for entrepreneurs
The main problem of a study conducted by the FCA identifies 68% of entrepreneurs believe that their broker traded for them, if they act as agent for the insurer at the same time.
The review of seven of the largest UK Small Business Insurance also revealed that, although 86% of small businesses believe that their broker was them the best quote from a number of providers, the broker was really only cover sourcing from a single source.
Clive Adamson, director of supervision at the FCA, said: "Small businesses are experts at what they do, but are often not as experienced to buy insurance This is why they need to trust their brokers to act in their best interest.. If conflicts of interest are not identified or not properly managed, is that put confidence in danger. "
The FCA criticized many brokers for their mistakes in dealing with small businesses -
Small businesses risk of improper advice, if the broker acted for them and the insurer at the same time
Business and management controls were missing to prevent conflicts of interest
Many brokers ducked dealing with conflicts of interest by disclosing the problem in writing instead of administration the problem
Negligent advice was more likely when add-ons and credit were involved in the transaction
"While the criticism focused on larger companies should all intermediaries to take the findings and ensure conflicts are handled appropriately," said a spokesman for the FCA.
The FCA also threatened sanctions or fine Broker, impose the insurance business for entrepreneurs missold.
