Brokers had criticised aggregators for not doing enough to stop SME owners purchasing insurance that left them underinsured

The Government has rejected calls to stop aggregators from selling insurance to construction SMEs.

Mark Herbert, boss of broker Construction Insure, had written to the government calling for the ban in response to small business owners buying cheap insurance through the sites which did not adequately cover their needs.

Several other brokers supported Herbert in his view that customers were buying cover from aggregators that left them underinsured.

But in its response to Herbert, officials from HM Treasury stated: “The Government does not prescribe the terms, conditions or price that insurance companies may set when offering insurance.”

Government response to calls to ban aggregators from the SME market

‘Firstly, thank you for taking the time to share your concerns about the level of insurance cover taken out by building and construction firms. The Government believes accessible insurance is vital for businesses and individuals.

‘Insurance gives firms the security to protect themselves financially against potentially life-changing losses. It is important that this market works well and keeps adapting to meet new needs and changing circumstances.

‘In this response, I would like to set out the Government’s position on how the insurance market is regulated.

‘The Government does not prescribe the terms, conditions or price that insurance companies may set when offering insurance. It is for individuals to decide what risks they would like to be insured against, and for insurers to decide what they are willing to cover. 

‘The respective capabilities of insurers to legitimately asses risk is a key element on which they compete and government intervention could distort the functioning of this market. This competition is important and should lead to better products and lower prices for consumers overall.’


In response to the letter, Herbert reiterated his call for the need for more regulation against aggregators.

He said: “Price comparison sites can’t and don’t ask the questions a specialist broker would, so businesses who use them are gaining no professional advice on the insurance product and in turn are left to their own devices, hoping what they have entered is correct.

“This to me is unreasonable. How can you expect someone in construction to have the knowledge of a specialist insurance broker? It’s like me doing my own loft conversion or extension, how would I know what to do unless I was given professional guidance and not an internet guide I have found on Google?

“Insurance is a serious business and if a contractor doesn’t have adequate cover it could be hugely dangerous to all parties involved in a build.

“Many contractors operate as sole traders rather than limited companies so if they were sued for inadequate work and found themselves uninsured they could lose their home and all their assets as well as their business.

“Many visit comparison sites, tap in the minimal amount of information needed for the cheapest quote and then they’re given an insurance document that looks the part when presented to customers.

“But these policies are cheap for a reason. The small print is filled with caveats and usually they only provide a minimal level of cover, often not adequate for the work the contractor does every day.

“A commercial broker on the other hand really gets under the skin of his or her clients. They find out exactly the nature of the work undertaken and can offer a policy which genuinely protects the contractor.

“From our enquiries, we estimate around 50% of all UK contractors do not have adequate insurance in place and this is largely due to the reliance on price comparison websites.

“It’s good to be acknowledged by HM officials and to understand their position on the issue, however I still feel there is a lot more that should be done to combat this very serious problem and I will continue my efforts to influence change for the building and construction sectors to close this insurance shortfall.”