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.

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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 : , , , , , , ,

Say it but don’t blame me

Posted by 2 May, 2015 (0) Comment

Sometimes it’s best to help your prospects understand what you offer that your competitors don’t rather than trying to highlight the inadequacies of your competitors. This is specially the case when the comments you make are in public especially when your competitors get angered easily and or have very deep pockets or in-house legal teams. This article explains what happens when someone is unhappy  with what you say about them, how to avoid it and what you can do about it.

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I have a client who has produced software that is absolute outstanding and reduces the amount of time you and I spend waiting for organizations to answer our calls. It also reduces the number of staff call center require and I think it’s a product that provides everyone with a benefit. They have nearly 1 million subscribers to their app so they must be doing something right.

There was a time, before they appeared on “Dragons Den”, that they were looking to generate a buzz about their business. They talked to a marketing consultant and eventually persuaded to use a marketing expert who’s specialized in generating PR for technology based businesses. It all sounds great, everything heading in the right direction.

 

We didn’t say that did we?

 

The marketing expert had decided to seed the press and other relevant forums with explanations about the different waiting times that people experience when calling well known companies. In theory these companies were not competitors to our clients. They were irked even angered, to find them self at the top of a table highlighting which companies leaves callers on hold for the longest time. The angriest was a particularly large company in the health industry and they decided to issue a letter asking our client to explain exactly where they got their information from and asking them to remove any reference to that company from the public domain. This was an understandable reaction to an article that was supposed to improve the profile of this client yet it just sort to anger a party they didn’t needed to anger and caused many other problems internally. The initial panic should never be underestimated when you get a letter from a in-house lawyer because they have so much time on their hands to deal with such issues.

naturally my first question to my client was had they actually made the points that the in-house lawyer objected to. Their answer was it wasn’t us. Yet when I used Google I found the article was credited to them. At which point they said it was an outsourced marketing expert who had put these articles together. I asked if the marketing expert had provided evidence of their insurance. Blank looks all round. I asked if the marketing expert’s research had been checked by my client. More blank looks. I asked if the marketing expert had used an specialist to research the details they were using. The blank looks continued.

 

Shall we tell them it wasn’t us.

 

This was the comment my client made next and I asked them if they thought that would send the complainant off towards the marketing company and they realized that was probably never going to happen. If that were the case, everyone would simply say someone else did it in our name and no one would ever seize or desist when the lining someone. Fortunately they didn’t need to have this conversation because we had already provided them with a legal defense if allegation of liable defamation or breach of confidentiality were leveled at them yet they still had learned a valuable lesson about suppliers. These days very few businesses are self contained. Nearly every company I know relies on a employee or another organization to help them deliver their product or services. However not all such businesses are as careful as they should be and you can either be guilty by association or considered guilty because something is done under your umbrella.

Top Tip:
Check your suppliers carefully if they have insurance and it is fit for purpose you can give them a free rain, which makes your life easier.

Wrap up:
If they don’t have insurance you shouldn’t be dealing with them. Because at best, your insurance premiums will creep up as your suppliers make mistakes. That’s like buying car insurance and allowing the worst driver you know and drive even though they are already banned.

 

 

Categories : Business Insurance,Company Insurance,Liability Insurance Tags : , , , , ,

Advisers “advice” drops client in it

Posted by 5 October, 2013 (0) Comment

This article about how insurances with the same “brand name” can look the same to the untrained eye, how pressure to provide quotations often stresses brokers, how lucrative industries carry the highest risks, and how you can reduce them.

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No two businesses are the same

 

Recently I was asked for “professional insurance” by two distinctly different businesses. One business advised multinationals on which businesses they should merge or acquire, and the other helped people in the UK to buy a business by finding them and introducing the investor to the current business owner. Both thought they were in mergers and acquisitions. This is seen as a very high risk industry by underwriters, and very few insurance providers will provide cover for such a high risk area.

The first business specialised in Anglo-Chinese business relations and was introduced to me by an accountant who understood exactly what I did. The introduction was made after the business had received a quotation that amounted to 18% of their annual turnover. You might think that is ridiculous, and it is, yet I have seen solicitors charged 38% of their turnover for insurance because of the ridiculous way solicitors are made to buy insurance.

Pressure cooker environment?

 

In each case, there was pressure to provide documentation to 3rd parties who wanted to work with these companies, yet insisted that they had appropriate insurance cover first. This is not at all unusual, in fact, about 50% of my clients have insurance requirements imposed on them by third parties. Yet they were all able to explain why they needed it and when the deadline was. So we make time to provide real advice.

Some of those I have been able to help were initially tempted to get the first insurance they could find that “ticked the box” of those demanding evidence that they were insured. Lot’s of people tell others “my insurance costs less than yours”. Giving in to the cost saving temptation means that businesses have ticked “a box” yet not actually protected their assets, income or reputation. Insurance that isn’t fit for purpose rarely pays out. Unless you are very lucky.

It actually takes as much as 30 days to arrange some insurances, because the insurance underwriters that understand emerging risks are in such short supply. After all, it is not car insurance, which has been commoditised and is available at the click of a finger 24/7, 365 – if you have a debit card.

Why are rates so high?

 

When talking to business owners looking for protection we first assess their requirements and then provide them with some ballpark estimates of the annual cost of protections. We do this because we are experienced enough to have a good idea of the rates achievable, and we know that some business owners haven’t budgeted for bespoke insurance. Some are shocked at the scale of the investment and we are often explaining that the situation is nothing to do with them. So who’s fault is it?

Some sectors have suffered from enormous losses because of the lack of care, skill, or diligence of the people operating in those sectors. Once insurance companies have “taken a hiding” from a particular sector, they might withdraw. You’ve probably read about how flood insurance is in such short supply. It actually isn’t, we have plenty of underwriters who will provide cover in reputed “flood zones”. Yet the media paint a different picture, and people believe what they hear often enough.

What the media don’t report is the high earning sectors that have suffered huge losses do not have many underwriters vying for their business, even if it is unique. This means that their rates will increase because there is demand, yet not much supply. Insurers need to come clean about the issues they resolve in a sector if they are to build trust and reduce risk.

Wrap up: Even if you are in a sector that has suffered losses there is plenty you can do to achieve the most competitive rates available. The first thing is to investigate losses that have happened in the sector in the past, and then work out exactly how to reduce them, using risk management. If you are unsure how to do this contact us and we will help where we can, or point you in the right direction.

Top Tip: When thinking of diving into a new sector, always speak to a set of good advisers first because solicitors, accountants, business advisers, perhaps even insurance brokers, may have experience in the sector or, at least, are able to point you in the direction of those that do. By asking the right questions you will find out more than your challengers know. The tax predicament, propensity to litigate and insurance rates will have a bearing on the profits you are able to make in any particular line of business.

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 : , , , , , , , ,

I know who did it

Posted by 24 August, 2013 (0) Comment

This article is about why people insure their equipment, what happens when it’s stolen, and how do you prevent it. This is a salutatory tale about people who rely on their equipment to do business and find that others have their eyes on it for other purposes.

 

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Business equipment is an asset to be leveraged

 

A client calls and explains how he’s been relieved of thousands of pounds of computer equipment and the office is in some disarray. He goes on to explain that the goods he was working on for his client have also taken a walk, and he needs to make a claim for replacing all said items. It’s not usual for IT companies to have clients’ equipment with them. So we discussed the items that had gone missing and forwarded the list of assets to be replaced to the insurance company. Insurance companies are always keen to keep the size of any settlement they make down and ask for receipts, so we had those ready.

Photographs of items suffice, where receipts had been mislaid or are with the accountant . It’s amazing how shots of general office shenanigans can prove useful when trying to prove that you did actually own a fantastically powerful computer. Digital inventories are really useful… if you have saved the digital record off site.

He did it

 

“I actually I know the b@$tard who did it” exclaimed my client, when i asked how they gained entry. He was adamant he knew the identity of the perpetrator. he was certain the CCTV would identify them. This is when CCTV becomes useful, it identifies people who do not wear baseball caps or other people who do not wear “identity avoidance devices”. But it is only a deterrent. CCTV has never prevented anyone from entering a premises. It has served to make criminals more “scientific” when trying to hide their identity. The only way to keep them out is to use physical devices.

Fortunately the client and I had discussed what was required a long time ago, so we already knew that the insurance company would be satisfied that the security was adequate. There is nothing that will stop a determined thief, so the insurers pay out on these occasions. It is the opportunist thief that causes problems for most people in serviced offices because they assume that a) the serviced office covers their equipment (because they should?) b) have great security people who man the desks 24/7 (they never go to the toilet?) or c) are responsible for anything stolen from the premises (they are not!).

They’re back

Older readers will remember that there was a sequel to Gremlins back in the 1990s. The Gremlins that were back in this case were actually the thieves. Yes, they came back and stole all of the new equipment just after it had been replaced. This is not unusual at all, it happens so often that it is laughable. Do the IT companies tip them off when they receive a new order? Do staff in insurance claims departments let thieves know where the new items are being delivered? Do delivery companies have miscreants within their companies that tip off undesirables? You and I will never know the truth. But somehow, people know when new equipment is delivered. I don’t think it is right to be naive and assume that this only happens because an opportunist thief happens to be walking past a office that new equipment is being delivered to. There are a number of ways around it, yet too many to mention here.

This sort of thing leaves a bad taste in the mouth. This is particularly poisonous when the police fail to remove the evidence from a CCTV system before it is deleted. No amount of encouragement will ensure that the police arrive at a non-emergency. They simply do not care anymore, they have been trained to meet targets rather than reduce crime. When they visit the site of a burglary or theft, and realise there is little evidence, they somehow to lose the will to do what they are paid for. It is regrettable that public services have gone this way, yet we must accept that it is a fact and protect our own environment. In this case, I will recommend that the client moves. If they do not, their insurer is likely to offer severely onerous terms and conditions which will not increase their annual insurance investment but will make entering and exiting their office a trial. Something that the cap wearing thief does not have to face too often.

Wrap Up: The police are there to help, yet they are not very good at following up on identifying criminals. The client is really annoyed that the “obvious” offender has got away with it – twice! However, even a private prosecution would fail without any evidence.

Top Tip: If it is your equipment, it is your responsibility. Never expect anyone else to pay for it. You make think your items are covered when in the possession of a third party that is repairing it. What happens if their insurance is inadequate?

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 : , , , , , , , , ,

Will Intellectual Property lead the UK out of recession?

Posted by 12 July, 2013 (0) Comment

This article is about the true value of intellectual property, the risks and advantages when leveraging it, and the solutions available.

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Intellectual property is Marvellous

 

Every week I meet someone who has had a great idea.  Not all of them will make as much money as Coca Cola, yet some of them are simply amazing. Naturally, these conversations are private and confidential, and I am often asked to sign Non-Disclosure Agreements (NDAs), before I am party to the secret. I don’t mind doing this because it helps build trust with entrepreneurs and inventors.

I think it is vital to protect the intellectual property in any country, UK Plc. seem to have more nurtured good ideas than most. The gentleman who designs Apple products is British, although he is an employee of Apple, so he is handsomely rewarded for giving them the rights and it makes sense to leverage an idea by partnering with someone who has the means to make the most of it.

The UK authorities are aware of just how much tax revenue they make when ideas created in the UK are well protected in the UK, so they have invested in grants making it worthwhile to protect intellectual property, because they make money when we make money.

Intellectual property risks examples

 

One inventor has designed a new water bottle for athletes. Another has invented one with a filter that means that it can be filled from a puddle, yet still be drinkable. When they initially approached me they had similar concerns, someone might copy it and they wanted to enforce their patent, design and trademark rights. Perhaps another manufacturer would try to flood the market with cheap copies that would damage the brand if people were injured whilst using an inferior bottle.

Social Media searches helped another inventor determine people who were jealous of the invention and were using very similar names to promote their product. In each case they can enforce their rights because they arrange protection to close down the miscreants or, at least, stop the fake or suspiciously named goods reaching consumers.

Sometimes this is achievable by a warning shot across the bows, commonly known as a cease and desist letter; this doesn’t always work. Authorities will act upon injunctions and stop goods leaving a factory, impound them at a distributors warehouse or prevent them being loaded onto a ship if the Intellectual Property owner has the means to enforce their rights. Sometimes this is avoided by the miscreants and the legal costs of enforcement mount up.

Some inventors have told me that they believe people will think twice when they have signed a Non-Disclosure Agreement, and that is certainly true for the vast majority of people. Large companies and corporations have taken advantage of the little guys and will stop at nothing to make a buck. Just a little research unearths companies who brought their manufacturing process back to the UK from abroad to find that aggressive companies in England started copying their top four selling items and promoting them on the internet.

Whoever let the copycat have the designs probably signed an NDA. It will take time to find out who the culprit was or if the data was stolen by hacking, employees or “external forces” have been known to do this. Without legal costs protection in place, even though they had protected their unique features and registered their designs, it costs a considerable amount of money, time and effort, to stop this happening.

The same applied to an Irish game designer, doing business in the UK, who was courted by a US publisher with a hawkish side. It cost $380,000 to get the game they “copied” removed from the shelves and they eventually gained a licence agreement for a share of the sales of his original ideas.

Intellectual property advantages

 

It is understandable that some companies do not want to register a patent because they know that there are really aggressive companies, especially in the US, who have a habit of copying ideas as soon as they are registered.  I don’t mean registered as a patent, I mean patent applied for. How they find out about such things is fraudulent, of course, and I share tweets noting those that get caught or the sectors that are at the biggest risk.  Savvy intellectual property advisors often recommend that registering be left until the last minute, yet this also carries the risk that someone else may have come up with the idea on a completely opposite of the world, and register it first, obtaining Worldwide rights, if they have the ability to do so.

When discussing these issues I let people know that there are ways of protecting such inventions without them being fully registered.  Get a registration in first, and inventors or designers can enforce their rights before they are registered. This makes patent attorneys and intellectual property lawyers very happy because it gives them a significant tool in their armoury and also enables them to generate fees when the protection process takes too long.

Large companies do not wait for small companies to enter the market before they attack them. A client is in the UK and bought a US Company and made it their branded subsidiary. The players who had the largest share of that particular US market instantly issued “malicious” proceedings against the UK Company before they had even started promoting their products.

 

Wrap Up: Intellectual Property is a real bargaining chip, if it is adequately protected.  Aggressors often try to tie new entrants up in legal process – which is a huge cost – especially in the US, to prevent them from spending their money on marketing and eroding the established leaders market share.

Top Tip: Having a non-disclosure agreement is great, yet you will need to enforce it if someone breaches confidentiality or trade secrets. This is simple yet not easy. Registering patents, marks, brands, domain names, or other unique features of a product or service, and the way it is marketed, can all form part of Intellectual Property protection.

 

 

 

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 : , , , , , , , , , , , , , , , , ,

Cowboys and Insurers catch policyholders in bug fight

Posted by 11 February, 2013 (0) Comment

This article looks at why insurance companies are not paying out on as many claims as they normally would, why inflated claims are not usually due to policyholders being greedy and how insurance companies can reduce costs by settling promptly.

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Insurance payouts on the decline

 

The Money section of The Sunday Times confirmed that insurers are using the current climate as an excuse to decline more claims than they normally would. The report confirms that 41% more claims are being needlessly declined, and this suggests a shift by all insurers to look at things with a “fine tooth comb”. The Association of British Insurers argues that insurance companies are always willing to pay valid claims quickly and speedily.

However, the Association of British Insurers do not deal with claims on a daily basis… I do, and I can confirm, categorically, that insurance companies are using any excuse and making people fight to get what they are contractually obliged to. Yes, your insurance policy is a contract, and they should be honouring the terms and conditions, rather than using spurious clauses to avoid making a fair settlement.

 

Someone is going to draw their weapon… smallprint?

 

One of the examples The Time reported was when an insurance company tried to decline paying a claim for damage caused by a water leak, by referring to woodworm that was found in the floorboards where the damage occurred. They stated that woodworm was not covered by the policy, and they are right. However, the claim was not for damage caused by woodworm, it was for damage caused by a leak, which every policy covers, unless there is a specific exclusion due to previous claims or unusual circumstances.

There is a good reason why this happens so often. Regrettably, people who are involved in the claims process sometimes make simple situations far more complicated than necessary.  In this particular case, the builder decided to mentioned woodworm in their report, encouraging the home-owner to have the woodworm repaired. On one hand, you can’t really blame a contractor for mentioning it. On the other hand, small print in the insurance contract meant that the home-owner initially didn’t get paid for something they should have been paid for. Fortunately, they didn’t give up.

 

Can’t we all just get along?

 

A better way to deal with it would have been to issue a report on the water leak, and issue a separate report for the woodworm, or estimate for fixing the problem. Sometimes the insurance company appoint contractors, and whenever they do, my head starts to hurt. Recent cases I have dealt with include an appointed inspection company visiting a premises three times because they failed to carry out a correct “validation” on the first and second occasions.

Our nationwide Insurance companies and local contractors can, and should be encouraged to, work together quickly and cohesively, in order to help their mutual clients, because they are clients to both parties. Local work keeps costs down and quality contractors work hard because repeat business is really important to them. Insurers only make a profit on repeat business so it makes more sense to keep clients happy instead of  leaving them hanging.  

 

Wrap up: The Times article finished off by recommending that policyholders enlist the help of their insurance broker. I would not recommend anyone to report any claim to any insurance company, until they have taken the advice of someone who understands why insurers decline claims, and can make sure it never happens.

Top Tip: When you are choosing any insurance always call the claims line before you make a purchase. This will give you clues as to how your claim is going to be dealt with, especially if they fail to answer the phone quickly, put you in a call queuing system, fail to call you back, or are downright ignorant. It is the claims department who will ensure that you get what you deserve, so it makes sense to try before you buy.

Who to share this with: SME Business Owners & Contractors.

 

Categories : Accountants Insurance,After The Event,All Risks Insurance,Building Contractor,Business Insurance,Company Insurance,Contractors Insurance,Customer Service,General Requirements,Health & Safety,Legal expenses insurance,Liability Insurance,Litigation expenses insurance,Personal Insurance,Solicitors indemnity,Solicitors insurance,Trade,Uncategorized Tags : , , , , , , , , , , , , ,