Trade

Contracts, Consultants and indemnity‏

Posted by 11 January, 2016 (0) Comment

Jason really was amazing, he managed to find insurance cover for me as a consultant valuation surveyor when no one else could. He  kept me informed of progress continually. I  would thoroughly  recommend him.”

                                –  Robin Smith, FRICS

Getting your contracts in order

 

Robin called me saying “I need urgent assistance”. I’ve won a contract yet they’re asking me for insurance and nobody can provide me with what’s needed. This is something we deal with every week because a lot of insurance providers have placed their products on the Internet and don’t have the facilities to give advice as to what fits.

Welcome back, or if you’re new here sign up to our orange RSS button to the top right of this page to receive insurance tips, new posts, plus details of events and promotions that could help you or your network reduce the risks facing their organisation.

The contract wasn’t complicated or onerous yet it was specific. The type of work to be carried out was slightly unusual yet the problem wasn’t the work it was the availability of cover. Robin also had a deadline to meet and so the frustration in finding red herrings all over the Internet was understandable. There were many providers that said they could offer the cover Robin needed but as soon as he scratched the surface they turned and ran in the opposite direction.

 

Insurance and contracts are usually at odds

 

Another challenge for Robin was that the contracts told him the terms and conditions of undertaking the project yet the insurance available has to be compare to the contract to ensure they dovetail. There are clauses in contracts that relate to insurance and there are clauses in insurance policies that relate to contracts.

Most insurances available via the Internet are no good when compared to contracts. The fact that so many insurance providers allow people to buy insurance without speaking to anyone is brilliant. Especially when you need something in a hurry. It’s not so brilliant when you need to speak to somebody and find that the Internet and, in particular the website that you found it on, doesn’t take your calls.

 

Whatever next?

 

Sometimes those awarding the contract start reading the insurance themselves and asking questions. Being cynical, they often ask these questions when they are due to pay an invoice. I’m not saying that they use this as a tactic to delay payment yet, if the insurance doesn’t meet the requirements, they will delay payment.

This happens most often when small businesses are working with a large company with an in-house legal team. They accept the insurance documents and only start checking the details when they are due to pay. This is so common we make sure that the insurance stacks up before it’s issued rather than suffer the pain of the late payment at a later date.


Wrap up
; Temptation to accept a contract with a large company is great. The offer may seem fantastic yet their requirements can offer the water down the profitability.

Top tip; Make sure you check the cost of the insurance before you negotiate your fees or payment terms. You might need insurance for a contract yet you don’t want to end up with zero profit.

Categories : All Risks Insurance,Business Insurance,Company Insurance,Contractors Insurance,Design Insurance,Intellectual Property Insurance,Legal expenses insurance,Liability Insurance,Patent Insurance,Trade,Trademark Insurance,Uncategorized Tags : , , , , , , ,

Efficient insurance isn’t always friendly

Posted by 23 June, 2014 (0) Comment

This article is about how improvements in technology should help providers improve the service to their clientèle. Read on to find out how IT has made life easier, where it has failed, and the backlash that is “in the post”.

Welcome back, or if you’re new here sign up to our orange RSS button to the top right of this page to receive insurance tips, new posts, plus details of events and promotions that could help you or your network reduce the risks facing their organisation.

Treating customers fairly?

 

Recently I have been learning how to use a new IT system which will increase our efficiency and profit. The people showing us how to use the system are terribly nice and say some nice things, yet also some very surprising things. One that really did surprise me relates to the way the system allows us to meet all the compliance regulations that are bestowed upon us, by the FCA (Financial Conduct Authority) I was pleased to find that the system made our life easier when ticking the compliance boxes.

It was during a discussion about “treating customers fairly” (TCF) that I was so surprised. TCF involves doing what it says on the tin – making sure that the customer is at the centre of what you do. This ensures that they are well treated and their aims are met whilst your business meets its aims too. For me, this is the most valuable thing you can do in a business, because customers are always right and when they are wrong, its usually because they have not been well informed. This is a statement that most business owners don’t want to hear, yet when they are the customer they realise that it’s actually true.

What’s the surprise?

 

The comment that surprised me so much was after I complimented the trainers on showing us how to add efficiency into our compliant processes. Our training lady announced that no one usually cares about this, to which I exclaimed “pardon!” because I couldn’t believe that a sector so beaten and bowed by criticism still fails to take its customers’ rights seriously. I enquired what the lady meant by “no one usually cares” and she reiterated that all the other people she trains (all is probably an overstatement) find ways to avoid ticking the compliance box of TCF. I am not surprised that this happens, but I am surprised that it is an industry wide problem. However, it does explain one scenario that has puzzled me somewhat.

Why is it important?

 

When I first went “alone” I carried out research and found that a healthy percentage of people that had purchased insurance were not sure that it was right for them. This meant there were people who would find our service useful. This gave us immense confidence as we ploughed our furrow and provided a service that isn’t available to all. It still isn’t available to all, because we could not possible service the entire commercial insurance buying public, not by ourselves. But watch this space. We have no immediate plans to dominate the UK, yet what I have discovered over the last few years has shown us that the vast majority of people who buy insurance are not treated fairly. There is work for us to do in changing that. It is a challenge, but one I am ready for.

Wrap Up: Not all insurance policies are the same. Not insurance companies are the same. Not all businesses are the same. So ensure you get what you need, before you need it.

Top Tip: If ever you do have a problem with insurance ask your supplier how they are treating you fairly, whilst dealing with the problem.

 

Categories : Accountants Insurance,After The Event,All Risks Insurance,Building Contractor,Business Insurance,Company Insurance,Contractors Insurance,Customer Service,Design Insurance,Domian name protection,General Requirements,Health & Safety,Intellectual Property Insurance,Legal expenses insurance,Liability Insurance,Litigation expenses insurance,Patent Insurance,Personal Insurance,Solicitors indemnity,Solicitors insurance,Trade,Trade Secret Protection,Trademark Insurance,Uncategorized Tags : , , , , , , , , , ,

Flatterers deceive UK start-ups

Posted by 19 April, 2014 (0) Comment

A spectacularly large US company flattered a UK start-up with a huge contract which was eventually signed and secured. This would give them the capital they need to multiply their success. The contract wasn’t exclusive and the start ups web application was valuable to many similar companies. A fantastic “result” and only two types of insurance were required by the US company.

Welcome back, or if you’re new here sign up to our orange RSS button to the top right of this page to receive insurance tips, new posts, plus details of events and promotions that could help you or your network reduce the risks facing their organisation.

Contractual responsibility

 

The contract issued by the Americanclient had 2 pages making direct reference to the type of due diligence, risk management and business insurance required of the start-up. The rest of the contract revealed 26 further liabilities and requirements that were, or would become, necessary.

Not all were manageable for a small company with limited cash flow. The really fine points of the contract referenced this exact point and made it clear they would take full and furious legal action if something went wrong. Ouch, a soft landing is required so we received an introduction.

Part of the liability related to the website, which was provided as a service, and had to be operational 99.9% of the time. The US company staff would be trained to use it and then supported 24/7. It had to work and the contract made it clear that they would want compensation for any downtime over 0.01% in any one year. Keep in mind that one way to compensate is not charge fees that are due.

Penetration testing must be the answer

 

It helps work out weaknesses today yet doesn’t account for advances made by hackers tomorrow. IT Systems security methods of suppliers aren’t always reliable and data theft was the main concern of the US client. They made the UK startup contractually liable for the costs of notification to the relevant authorities and those whose personal data is compromised.

This is a really tough figure to try and quantify because few own up when they have a data breach so the statistics cannot be compiled. Contrast that with fires where it is easier to quantify losses.

That won’t change just because it becomes a must to do (new regulations are due to land in the EU in 2015). So if some Herbert got at the data, the US company would have to spend to meet US regulations and the UK start-up could be ruined by the losses. Identity theft costs vary from person to person so it really is a difficult number to calculate.

Legal liabilities change across borders or state lines

 

The chances of a breach are minuscule, the costs ridiculous. The damage to brand immeasurable. Get a lawyer to get legal on your contracts and they’ll close the gaps. Some clauses don’t hold water in the UK yet US companies issue proceedings where they want. The contract formed a vicious circle when the statement of work and suppliers agreement were reviewed together. No stone had been left unturned and the US company had a fair minded legal team. That is not always the case.

However, there was a liability of millions and the supplier of the application’s infrastructure were only going to cough up £182k if they failed to maintain their supply. Worse still, the infrastructure wasn’t easy to transfer to a new supplier and a 30 day window tied the start-up down. No fix in 30 days and the US contract terminated automatically. And further contracts would not have been issued by them or anyone else.

We deal with cyber risk every weekly basis. It rarely touches the smaller business, yet their suppliers are at risk. Cloud sounds great yet it is not as solid as your own database with your own security. The solutions are a contractual nightmare.

Wrap up: It is not unheard of for a large company to issue a contract to a start-up, allege an error and drown them in legal proceedings. This is because they can then strike a deal which leaves the start-up Directors free of debt if they give up their Intellectual Property. Only in America? No! Uk companies do this too. Does Directors protection work in these cases? No! See why here: http://www.cobinecarmelson.com/wp-content/uploads/2011/11/What-are-Directors-real-risks.-CCLv5-URL.pdf

Top tip: One digital games company signed an NDA and found the other signatory copied their ideas and started selling their titles. It cost £300,000 to force them to stop and compensate the original designer. There is no point getting someone to sign an NDA unless you have the means to enforce it !

Categories : Accountants Insurance,All Risks Insurance,Business Insurance,Company Insurance,Design Insurance,Domian name protection,General Requirements,Intellectual Property Insurance,Legal expenses insurance,Liability Insurance,Litigation expenses insurance,Patent Insurance,Solicitors indemnity,Solicitors insurance,Trade,Trade Secret Protection,Trademark Insurance Tags : , , , , , , , , , ,

Lambs slaughtered in Den

Posted by 28 March, 2014 (0) Comment

This article is about people eliminating threats to their business, taking risks and getting others interested. Read on to find out how the intrepid pitch for investment yet fail to illustrate their position on risk, never mind secure someone else’s hard earned finance.

Welcome back, or if you’re new here sign up to our orange RSS button to the top right of this page to receive insurance tips, new posts, plus details of events and promotions that could help you or your network reduce the risks facing their organisation.

Dragon’s Den is a risk worth taking

 

I learn a lot when watching Dragons Den. It is always interesting to see a great idea. Everybody loves those. Yet, a lot of the time we are treated to ‘car crash television’ where it appears that the unprepared have been literally thrown at the Dragons. I have actually cringed when watching the programme, yet it is rarely the Dragons that scare me. It’s some of the characters that arrive and put their “worst” foot forward. On the other hand, my heart does sink when a genuinely warm, credible person drops themselves in it. Even then, I don’t feel sorry for too long because I have a lot to learn myself.

Even though I’m watching on television, it’s not hard to spot the weak points that are being attacked. I’m always alarmed by those who do have a great idea, a coherent plan and still fail because they didn’t think about the objections that would inevitably be raised. When they shoot themselves down in flames I feel their pain. I suppose not all of it can possibly be unwitting. I expect some people do well out of the exposure even if they don’t get the investment they were after. Good luck to them!

Sometimes you can smell the ill-preparation

 

Recently a couple of entrepreneurs explained they had a huge following and people were biting their arms off to extend their travel and tour company business to take in festivals in different places. I had heard of this type of business yet they seemed to have a way of making it cost efficient and therefore more profitable. The Dragons were listening. Right up until one of the Dragons mentioned that they were not happy that the risks to the business had been thought about in detail. The lady announced that “all it takes is for one hotel to go down and you are snookered”. I had heard the guys mention that they were ATOL/ABTA protected which means that their clientèle are flown home in the event of the holiday providers having financial problems.

They should also have mentioned that ATOL/ABTA (and others) provide insurance that covers them for most of the other costs that follow such issues. They didn’t. Why not? Didn’t they realise this protection was available? Had they decided that insurance was too expensive for their business? It didn’t sound right that people who had been sending clients on trips to festivals around Europe hadn’t put any protection in place for their clientèle, never mind their business. I remain puzzled because the investors lost interest. No surprise there then.

When the Dragon questioned whether they would be able to continue if a third party let them down, all they had to do was say they would insure the risk. Even if they hadn’t arranged it at the time they could have accounted for the investment in their plan. It rarely “breaks the bank” to protect oneself.

 

Wrap Up: If you have a great idea think about the threats that could interfere with your business plan. Reduce them or eliminate the impact completely where possible because Dragons are risk averse, they only  take balanced risks. They don’t assume. They gauge their possible ROI based on all the variable outcomes. You can too.

 

Top Tip: If you are looking for investment try and understand just how risk averse your investors are before you pitch to them. Their previous investments will give you clues.

Categories : Accountants Insurance,After The Event,All Risks Insurance,Building Contractor,Business Insurance,Company Insurance,Contractors Insurance,Customer Service,Design Insurance,Domian name protection,General Requirements,Health & Safety,Intellectual Property Insurance,Legal expenses insurance,Liability Insurance,Litigation expenses insurance,Patent Insurance,Personal Insurance,Solicitors indemnity,Solicitors insurance,Trade,Trade Secret Protection,Trademark Insurance,Uncategorized Tags : , , , , , , , ,

Double agent leaves tenant between a rock and a hard place

Posted by 9 February, 2014 (0) Comment
This article is about tenants, builders and surveyors. One of them behaved badly when an insurance claim occurred and it’s not who you think. Insurance fraud is a huge problem for all of us. This article gives you some clues as to how you can avoid getting caught up, and caught out, when someone thinks it’s OK to commit fraud.
Welcome back, or if you’re new here sign up to our orange RSS button to the top right of this page to receive insurance tips, new posts, plus details of events and promotions that could help you or your network reduce the risks facing their organisation.

Leaks can be a real drag

 

A last minute call before Christmas comes from a client in a mini panic because the client facilities at their studio have got pools of water where it shouldn’t be. The area has to be sealed off because of the leak and the business might have to close, albeit temporarily, if gets any worse.

This is a straightforward issue for us, yet it could be the first time a client is going through this scenario and prompt assistance and advice is what they need. We provided the reassurance that we promised, confirming that the damage to their property was covered. However we instructed them to contact their landlords insurance people because the leak had not sprung from nowhere. It was likely that both insurers would need to be involved. This is quite common and, in this case, a managing agent handled insurance affairs for the landlord.

Property Manager or Mangler?

 

After a fashion, I received another call from the client explaining that the property managing agent did not want to offer much assistance. They simply said “the builder must be responsible”. I reminded the client that their landlord had cover for investigating leaks, which had become clear when we checked their insurance provision at the beginning. Armed with this information the client/tenant felt confident in contacting the managing agent and pressing their point home. Subsequently, a surveyor arrives and determines that a pipe has not been correctly sealed, causing water to leak and bubble up through the flooring. Luckily it was water rather than waste that leaked, so the damage wasn’t too messy.

In the ordinary course of things, this would have been simple from here on in. The landlord’s insurance pays for the tracing of the leak and the builder repairs the pipe they installed defectively and the client has insurance to repair the resultant damage to their flooring, etc. The managing agent had other ideas.

Why do people think it’s OK to to defraud insurers?

 

The managing agent contacted the tenant and asked them to pay for the surveyors invoice. When they refused, because it is not their responsibility, the property managing agent said “completely off the record, it will be much easier to do business with us if you tell your insurance company that this was an uninsured part of the landlord’s policy, or write a letter confirming that there were more damaged areas than was actually true”. They wanted to recover the cost of the surveyor without resorting to their own insurance. Or rather, the landlord’s insurance. This seems daft because it’s not their insurance to worry about. It’s the landlord’s! Doing their job properly means presenting insurance claims to insurers in order for them to be settled promptly, fairly, and keep the premises in good shape.

What we know is that this happens all too often. Regrettably, property managing agents have to have their fingers in the landlord’s insurance pie, and they do deals with insurance companies, not always with the landlord’s knowledge, that means that they get paid extra if they do not make too many claims. This is on top of the income they receive for managing the insurance, which is paid to them by the insurance company and allows them to charge the landlord less for the overall management of the property. To landlords this is either something they are unaware of, or dressed up as a good deal. However, they don’t seem to realise that it is going to cost them money in the long run if the property is not well looked after.

Surely the managing agent should be looking after the property rather than trying to earn money out of the insurance that they don’t even pay for. People find it hard to believe that this happens, yet property managing agents seem quite willing to hide the commissions they receive from their clientele and mess up claims situations when it suits them. At the end of the day they always blame the builder or the tenant. Who is the landlord going to believe?

Top Tip: Always check the insurance arrangements of a premises you are about to buy or lease, because you will find insurance history can paint a different picture to the particulars you were originally shown.

Wrap Up: There are some great property managing agents out there yet there are also plenty of rogues. Accountants have told me that they have recovered many hundreds of thousands of pounds from property managing agents who stitched up the owners of properties they looked after. It’s not just on insurance, they do the same on maintenance issues and when repairs are required. Take a closer look at the bills they are sending and see if you can spot any trend that doesn’t make sense.

Categories : Accountants Insurance,After The Event,All Risks Insurance,Building Contractor,Business Insurance,Company Insurance,Contractors Insurance,Customer Service,Design Insurance,Domian name protection,General Requirements,Health & Safety,Intellectual Property Insurance,Legal expenses insurance,Liability Insurance,Litigation expenses insurance,Patent Insurance,Personal Insurance,Solicitors indemnity,Solicitors insurance,Trade,Trade Secret Protection,Trademark Insurance,Uncategorized Tags : , , , , , , , , , , , , ,

Travel for business is rarely pleasurable

Posted by 20 December, 2013 (0) Comment

Recently a intern from the United States got appendicitis while he was seconded to us. This article highlights the inconvenience this causes to an individual, the business, and everyone.

Welcome back, or if you’re new here sign up to our orange RSS button to the top right of this page to receive insurance tips, new posts, plus details of events and promotions that could help you or your network reduce the risks facing their organisation.

Knowledge is not power every time

 

Stephen had majored in bio mechanics. It didn’t stop him coming a cropper when his body decided to give out whilst in the UK. He had never had issues with his stomach before, and who knows what actually caused his appendix to grumble. No one was more shocked than he, when he was told he needed a surgical intervention. To say I was shocked was an understatement. The people who look after him called me to say that he had been hospitalised and that he wouldn’t be able to work for 48 hours.

Little did we know, this was just the start of his problems. The first thing to consider when an employee falls ill is their welfare. Fortunately, we have the NHS, and I knew Stephen would be well looked after. However, after he had been stabilised the boredom set in, and his real nightmare began.

Completing projects benefits everyone

 

Stephen wasn’t exactly overjoyed when his mother arrived. Who can blame her, she was really worried about her still teenage son. However, Stephen was more concerned about his father and brothers, who would, at first, starve for a few days. His other concern was that they would give him a lot of grief for removing their carer for a few days. When it became evident that doctors were too quick to discharge Stephen, he headed back to A&E with an issue that could not have been related to his missing appendix. The doctors were more concerned this time, as surely, they hadn’t removed his appendix for nothing.

It was at this time that Stephen became extremely apologetic and was more than a bit miffed. He had intended to show that he was not a one trick pony, by completing a project that we had agreed upon before he arrived in the UK. It was evident that he would be able to start the project, but certainly not complete it. So after the welfare of a sick employee is resolved, there is still the lost time and productivity to think about.

Why do clients trust us with their travelers?

 

Usually I’m dealing with clients whose staff have been taken out of action whilst they are abroad. The things that have happened recently include someone in the USA cutting their hand on a tin of beans (I kid you not!) and had been relieved of $4,000 by US hospitals. More pressing was the cost of the employee who had to be sent to replace them. The presentation they could not complete still had to be delivered on time. Don’t even get me started on the issues that clients had with a volcanic ash a few years ago. That was the week when everyone who thought that it would never happen to them, realised that it had. The one issue a client raised with me that I thought would never happen, is probably the most tragic I have ever been involved with.

Luckily, I did not have to deal with the issue on the day it arose. Before I ran my own business I worked for brokers who spent a lot of time working with charities. Imagine my horror to hear on the news one day that a young person had been attacked by a polar bear whilst on a field trip in an inhospitable region. Your thoughts turn to the family of the injured at times like that.

There was a fatality in this case, yet I was also certain that the emergency assistance that I had arranged for this particular charity had the resources, including helicopters, to make sure that everyone on the ground was helped as soon as possible, and that the students were spirited away from the area as soon as was practical. I also know that a counselling service was available for those traumatised by the issue. It’s not often someone in my industry can take pride when something goes wrong. You really, sincerely, hope it never does. Yet knowing what you have done professionally has helped people personally is what we strive for.

Wrap Up: Some of my clients go as far as covering the holiday travel arrangements of their staff, as they don’t want them to be left stranded in a foreign clime because their personal travel arrangements fell apart. If you run a tight ship then all of your staff are absolutely necessary, you don’t want to be without them for a few days just because a travel insurance company decides to wriggle out of their promise to get all travellers home when they need to be back.

Top Tip: Planning for the worst might seem pessimistic, but it pays to be prepared. Make sure you are covered for every eventuality – if you can imagine it it can happen.

Categories : Accountants Insurance,After The Event,All Risks Insurance,Building Contractor,Business Insurance,Company Insurance,Contractors Insurance,Customer Service,Design Insurance,Domian name protection,General Requirements,Health & Safety,Intellectual Property Insurance,Legal expenses insurance,Liability Insurance,Litigation expenses insurance,Patent Insurance,Personal Insurance,Solicitors indemnity,Solicitors insurance,Trade,Trade Secret Protection,Trademark Insurance,Uncategorized Tags : , , , , , , , , ,