Many brokers have clients in the tech sector without even knowing it but recognising and responding to the needs of a tech business is important. We list four reasons brokers need access to tech sector expertise.
Published on 24 September, 2021
According to TechNation, a tech business is a “business that provides a digital technical service/product/platform/hardware, or heavily relies on it, as its primary revenue source.” Yet it’s common for many different types of companies to identify as a tech business, as there is a belief that they are more advanced and more attractive from an investment or partnership perspective.
As a broker, understanding your client’s needs as a tech business is imperative to providing the right service and protection. Simon Webster, Technical Line Manager at Markel UK, discusses the benefits of brokers having access to specialist tech knowledge, and Jonathan Dopson, Client Director at Protean Risk, tells us how that knowledge has facilitated a better service for his clients.
Here are four reasons brokers need access to tech sector expertise:
1. Details are important
First off, it’s about understanding the sector itself in more detail. Simon says that “due to the nature of their client base, most brokers will find themselves needing to be a generalist, someone who can give great advice to a broad demographic of clients. They could have one or two tech clients, many retail clients, and a diverse selection of manufacturing clients. They have to be able to move between those clients quickly and easily. When faced with a specialist risk, they may find it useful to find a partner insurer who can guide them through the specifics of that individual sector.”
When discussing the need for specialist knowledge and cover over a more general policy, Simon says: “When we look at specialisms, we look at the things that are relevant to the sector and provide cover that is more specific to them. So, an example in life sciences would be that we offer clinical trials cover, which wouldn’t be included in a standard policy. At Markel, we help our brokers with tech clients to understand the new answers of what cover is required and how it is required.”
Having access to Markel’s tech sector expertise and knowledge of the smaller details has helped to protect Jonathan’s relationship with his clients: “The willingness of Markel to partake on client calls has benefited all parties in time saving and fostering the relationships, resulting in positive ‘wins’ for the businesses but, more importantly, a good end result for the client.”
2. There are nuances of language and regulation
Then it’s about really understanding the nuances of the terminology and regulations. Simon explains: “The tech product sector, IT sector and life sciences sectors all have their individual terms, special acronyms, regulations and legal positions. All this can change the underwriting position on a risk, Understanding how a sector works allows underwriters to give comfort to brokers and policyholders that, provided the risk has been presented fairly, there will be no uncomfortable conversations about coverage intent if a claim were to arise.”
“If they need a specific question answering then they come to us and we help them understand what they need to draw out from their clients and what the implications are, so everybody is on the same page in the event that a claim happens.”
3. Technology and its risks keep changing
Staying up to date with tech is a continuous learning process, as is understanding the risks associated with it. Jonathan says: “Naturally the technology sector develops at a fast pace and so the professional indemnity (PI) exposures of the clients operating in this sector are equally subject to change. For general insurance brokers and even PI specialists, given the number of lines of business or professions dealt with, keeping up with this can be challenging.”
The sectors that Simon deals with at Markel are all fast-moving technologies. “Everything changes from day to day and everything we see is the next step change to what we have done before which is different to more traditional sectors, like metal work or woodworking,” Simon explains. “On the tech side, each week, each month, each year, everything has moved on and the exposures change, and you have to keep up to date with that. As a sector specialist, the more you are dealing with tech and the more long term you are working on these risks, you are always going to stay up to date with the latest knowledge.”
4. Cover should be specific to the sector
Tech businesses have specific needs and require cover tailored to the industry. Without knowledge of the sector, Simon says that “you risk buying the wrong cover or being advised to buy the wrong cover.” While it may not be initially obvious, standard cover often won’t have the additional sector-specific elements built into the cover that help to protect it in the result of a claim. “The client ends up suffering because the wrong cover has been inadvertently purchased and their broker has not realised that it’s not suitable for them” says Simon.
Having benefitted from Markel’s service, Jonathan is an advocate of reaching out to external sources for support. He says that “being a good broker does not always mean having to know everything. It does mean being willing to work with an insurer in order to obtain the relevant information. Being able to lean on the expertise of a specialist tech team allows brokers to strengthen their client relationships.”