What you Need to know about Commercial Insurance Brokers in South Africa

Posted by Hippo on 10 February 2025

What You Need to Know About Commercial Insurance Brokers in South Africa

Getting insurance for your business is serious business. Whether you own a construction company, funeral parlour, driving school, guest house, or courier delivery service, you don’t want to skate by without proper cover.

But should you be using a commercial insurance broker, or go direct?

Below, we look at what you need to know about brokers' insurance before you opt for it.

What You Need to Know About Working with an Insurance Broker

#1 They May Charge Service Fees

You may go into your arrangement with your broker believing that you won’t need to pay them anything. After all, they’re earning commission on your premium, right? It’s important to note that insurance brokers can charge clients fees.

Luckily, reputable brokers will let you know about any extra fees well before you use their services. If they don’t, make sure to check this ahead of time.

#2 There Are Independent and Tied Brokers

Independent brokers work with many insurance companies, while tied agents represent a single insurer or a limited group of insurers.

Independent brokers:

Offer a wide range of options.
Can negotiate better deals by comparing multiple insurers.

Tied brokers:

Have a deep knowledge of the insurer’s products.
May be useful if you already have a specific insurer or insurer group in mind and want help navigating their policies.

Familiarise yourself with important business insurance terms with the Hippo glossary.

#3 They Need to Be Registered

Brokers need to be registered with the Financial Sector Conduct Authority (FSCA) to work in South Africa. This ensures they meet legal, ethical, and professional standards.

Working with an unregistered broker means you might have no legal protection if things go wrong and puts you at a higher risk of fraud or bad advice.

To verify your broker’s registration, visit the FSCA website and use their Financial Services Provider search tool.

Important Questions to Ask Your Broker

Are you registered with the FSCA?
What are your fees?
Which insurers do you work with?
Do you specialise in my industry?
How do you handle claims support?
How often will you review my policies?
Are there discounts or benefits I qualify for?

The Other Route: Taking Out Commercial Insurance Yourself

DIY Insurance: A Direct Approach for Business Owners

Brokers can add value, but it’s not the only way to take out business insurance. If you’d rather cut out the middleman, you can gather and review your own insurance quotes.

Phoning multiple insurance companies takes time, though. An even easier route is to use an insurance comparison site like Hippo. In just a few clicks, you can get several commercial insurance quotes on your screen to compare side by side. It’s all free, and there are no obligations to go with any insurer.

Why Direct Insurance Could Be the Best Option for Your Business

1. Transparency in Insurance Options

Hippo gives you a range of quotes from multiple insurers at once, providing a clear market overview. This allows you to compare costs, coverage, and benefits directly without relying on a broker’s interpretation.

2. Potential Cost Savings

Since platforms cut out the middleman, you might save on broker fees. You pay only for the policy, not for advice or additional services.

3. Control Over the Insurance Process

A DIY approach puts you in charge of reviewing options, reading the fine print, and making your own decisions. This way, you get a deeper understanding of what you’re buying and can customise your policies as needed.