Landlords lord it over leases

Small print, in leases, that is rarely read, can lead to insurance problems, uninsured losses of occupants and confusion over who pays for what when thieves target leased or serviced offices.

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The price of fashion

Mark calls me and tells me that his office has been broken into overnight. Indeed, all six offices in his building have been turned over.  The office is in a fashionable part of London, and somehow they managed to bypass the security on the front door, unpick the locks on the first floor security door and then pull each of the glass doors to each office, off their hinges. Mark wasn’t initially concerned about the items stolen because it was only a redundant laptop, and a safe full of paperwork, rather than money.  He did feel sorry for the five other companies on his floor, because the laptops that were stolen from them were new, contained sensitive data, designs, plans, and other important information… not all of which had been backed up.

How the thieves got past both doors seemed a bit of a mystery, the CCTV was in operation and the footage would show who exactly the thieves were.  However, it transpired that the main door lock was not working properly, and the heavy security door on the first floor had not been locked by the last person to leave. No one wanted to admit it was them who had left last, and in such circumstances it’s never easy to determine who that might have been.  The CCTV could identify the culprit, albeit not the culprits that everyone initially thought the CCTV would be used to identify.

Landlord negligence is uninsured?

The broken door to the street had been reported to the landlord, so they had been negligent in not arranging for an immediate repair. This certainly would have prevented the problem,  but how did the thieves knew that this door was not working. It’s not sinister, they are purely opportunists. It’s daft that both security doors were left unlocked at the same time but it happens because we’re human and forget things. Sometimes these mysteries are never unravelled. Mark would have been gutted if it had affected his cover.

I had already visited Mark’s premises, to ensure that the security that he did have control over was accepted by his insurance company. When we first explored Mark’s prospective requirements, we had to negotiate with insurance companies because some of their humans had forgotten that a trendy office should have a glass sliding door. If you ever look at insurance company requirements you’ll find they’re quite ambiguous when an unusual feature is in existence. This often crops up with serviced offices, because landlords of these places do not spend a lot of money on the security because they assume nobody will get past the desk security.

They don’t realise that it’s not unusual for someone to “stowaway” in a premises and rifle through unattended offices overnight, before pushing an emergency exit door open and carting off their booty. Thieves love serviced offices because landlords are never going to warn proposed clients of this weakness when they are trying to sell them their office space.

Who is going to pay?

You would think that the landlord would accept responsibility, having not fixed the door. However, in my experience, they simply refer you to the clause in the lease, which confirms that they are not responsible for a loss of this type. The way leases are worded, it could be argued that they are not responsible for anything, but I am not a lawyer – I only wish I were that clever. The excess on office insurance is usually quite low – around the same amount as an hour of a solicitor’s time. It makes sense to pay a solicitor to review a lease or serviced office agreement. They will advise you on exactly what the landlord not taking responsibly for, giving you the opportunity to cover yourself for the balance

So, how do you enforce your rights against a negligent landlord? You could, in theory, stop paying your rent – to balance things out. However, you will find that an established legal process will kick in when you don’t pay your rent, because clauses in the lease normally dictate that there is no relation between the two issues. You might have to sue them, or at least threaten to. And if you are going to do that, you will need some sort of legal backing. This is widely available; indeed, a lot of people have this form of protection, yet because their cover has not been explained to them in detail they would not even know.

Wrap up: When you are in an office or any premises where you do not control the security, it makes sense to ensure that your premises are well protected. If undesirables do visit, and find that your security is stronger than everyone else’s they will, at least, leave you until last because they are usually in a hurry. It takes seconds to prize a door open and rifle through an office – thieves are usually after things they can sell for cash, don’t you just love the modern phenomenon of “pop-up” pawn shops. The fact these thieves took the safe indicates that they had a getaway vehicle, yet this is not always the case. The security to your premises is your responsibility. Don’t expect a landlord to be too concerned about it.

Top Tip: Mark discovered that the sensitive information in the safe meant that he did actually have to notify people if their privacy was likely to be breached. This is a requirement of the data protection commissioner, and applies to anyone who collects certain types of sensitive data. Fortunately, Mark and I had discussed this at the outset and the cost of doing this was not prohibitive.

Health and Safety can make you feel ill

This month is about the perils of consultants who, errr, don’t consult, why anyone offering insurance as an “add-on” should be carefully checked, and the scale of the trail of damage they can create.

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‘Elf & safety chancers

My hotelier clients are truly wonderful people. Like myself, they ensure that their clients get a good night’s sleep 🙂

One of them called me the other week and asked if their insurance covered them for the new regulations. “I must have missed something… what new regulations?”

It transpired that a Health & Safety consultant had turned up out of the blue,  making out they were some sort of official and asked to look around.  After lots of tutting, he then told the hotel staff that their boss was going to be jailed if they didn’t sign a contract for three years advice.

Putting the frighteners on (best gravelly voice required)

The fact the hotel already had an up to date and robust Health & Safety policy hadn’t crossed the consultant’s mind. He just wanted to scare people into signing up. It’s why Health & Safety has such a bad name. It’s used to frighten people into parting with their hard earned money instead of protecting people as they go about their day to day life.

Even worse than “the frighteners”, is the fact he included insurance in his offering. This would have been, in part, a duplication of cover that was already in place. What’s wrong with dual insurance, I hear you ask?  Well, it causes delays at the very least, because each insurance company will suggest that the other is responsible for settlement , a case of “after you, Claude”.

So who pays – not the con man

In the worst case scenario, it can lead to claims being declined because insurance companies get a bee in their bonnet when they assume that claimants are trying to claim twice. It’s seldom true – people resent the hassle of insurance, never mind paying for it twice. It can lead to policies being cancelled because of something called non – disclosure.

And it doesn’t end there. If someone’s policy is cancelled by an insurance provider then they must inform future insurance providers of the cancelled policy, at the time that they are seeking alternative insurance solutions. Insurance companies can void the claims of those who have an an incidence of non-disclosed cancellation.

If the current insurer decides to increase their policy premiums because they suffered losses elsewhere in their portfolio, you wouldn’t want to be stuck with them forever.

Wrap up: Health & Safety is important, yet should be treated as a way to prevent issues, rather than be used as a stick to beat people with.

Top tip: Check your Health & safety, employment tribunal and other business protection practices do not include duplicated insurance.

What is the dirty little secret of Insurance? part II

I’ve previously posted how your legal expenses cover probably allows you to take action against anyone except your insurance company. The second in this series moves us all towards the sticky wicket of Health & Safety. This week I write about why legislation is a prerequisite to getting claims paid, why insurer’s don’t make it clear that this is part of the insurance contract and how it is kept a secret.

Read Insurance’s dirty little secret – part I

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Why do insurers do this?

They are businesses. The fewer claims they pay the more their shareholders receive. However, they also need to attract customers, and cynically hiding the worst parts of their products and service allows them to do so. They make the cover out to be wide (using terms like comprehensive or all risks) yet the exclusions seem little (fine print).

They will decline the claim of one company on the same day as they accept the proposal of another (almost) identical company. Both companies will have similar risks yet insurance companies know MDs and FDs would not buy from them if there weren’t going to get a ROI.  So they “sell” the benefits and make sure they have room to wriggle in their policy documents. You might only see the detail after you have parted with your premium.

Why is it dirty?

Legislation changes all the time and it’s difficult to keep up with it. Insurers know that businesses struggle, so they provide practical help to the top tier of their clients or those that are extremely high risk. That’s because losses suffered by some businesses are huge and it’s incredibly bad PR for an insurer to decline a ‘front page’ claim.

Brokers know this too.  In a world where every premium increased every year most brokers would be happy. I meet lots of business people who are unaware of important terms and conditions. When a claim is refused or reduced the broker often blames the insurer. Sometimes they charge a client more to move to a different insurance company.

How is it kept secret?

The clause that catches most people out is in nearly every policy. It doesn’t even mention Health & Safety – it’s that ambiguous. It’s not even highlighted in the ‘key facts’ documents that the FSA insist make insurance buying clearer.

I know FDs that have checked insurance for years and never understood what this clause really meant. In black and white; if you are not following every piece of legislation current today you may find that a loss that happens tomorrow is not insured. And if they do pay it you might find your premium increases without a satisfactory explanation.

Wrap up: Are you keeping up with legislation? Insurers expect you to do your bit before they do theirs. An insurance policy isn’t a guarantee. Insurers are obliged to pay out when terms ad conditions of the policy (insurance contract) have been met.

See our top tips section for simple ways to help yourself today.

Business owner deflated by sinister claims tactics – part II

This is the second part of a two part blog about another dirty little secret of insurance. The attempted application of this one even shocked me, and I’ve had 21 years experience of exposing their secrets. You can read part one here.

Read on to find out how this scenario unfolded, how the secret affects both businesses and families, and what you can do to avoid being kept in the dark.

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Bicycle Theft Leads To Flat Service – Part 2

Having carefully selected the appropriate policy for a client whose family relied heavily on their bikes, it was a big headache when an excessive deduction was presented by the insurer, when our client’s bikes were stolen. This large deduction was not in the policy wording, which is of course a contract between insurer and their policyholder. Rather been dealing with the claim validators, we went straight to the management of the insurance company claims department. We know where they hide (whoops, I mean hang out!).

The claims department agreed that the deduction was not in the policy wording and fair wear and tear would be 20 percent. New bikes were ordered and a long argument avoided

The bicycle suppliers were instructed to send the new bikes directly to the client who was happy that he didn’t have to fork out an unreasonable amount to put himself back to where he was before the theft occurred.

Making sure that people are not financially affected by the unexpected is the main priority for us. Keeping inconvenience to a minimum is an important part of our service.

Deductions are plain wrong as they mean claimants do not get the return they were promised when they were prudent and invested in insurance. Avoiding reduced settlements is not easy, as it seems that staff in insurance claims departments are trained to make claimants feel uneasy.

Cynics might say that insurance companies purposely make it uncomfortable for people trying to get their valid claims settled. By making them stick to the letter of their own contract these hurdles can be overcome.

An amicable discussion about fact and contract is the way forward.

I personally have 20+ years of experience in dealing with claims department and actually help them stick to their procedures whilst getting claims settled. I also agree with the use of new technology, including lie detecting to sniff out fraudulent claims. If you have nothing to hide, it’s fine.

Wrap up: Thousands of business owners are still waiting for their damage and lost profit claims to be settled following the London riots last year. It is prudent to assess if there are risks to your way of working because of the actions of others.

Top Tip: If you have already been given a bike by your employer or company under the bike to work scheme make sure adequate cover is in place. When it comes to finding a replacement the bike should have been insured by the company or the rider. If a road accident is caused by a cyclist’s wobble who pays for the resultant damage and injuries?

Who to share this with: Business owners or bicycle users.

Discover how your business network can help your clients

Your network can help you keep clients as well as find new ones

Here’s a simple way to add value to your product or service.

From time to time your clients will reach the limit of your product or service. With a good sales and marketing process you will have already set the parameters of where those lines are drawn. However, you can add value if you have worked out who can help your clients where you can’t. Read on for examples. Read the rest of this entry

Want to secure cashflow despite bad luck?

Fire risk assessments are not exactly high on the list of priorities for everyone. Some small businesses might think fire evacuation procedures are not important. So spare a thought for the business owner in Scotland who didn’t think a fire would ever affect his organisation.

The business was unlucky enough to suffer a fire and they didn’t have an evacuation procedure, they probably couldn’t find the time to do it – especially as there 101 other things to do every week to keep the business afloat.

The fire brigade arrived yet the absence of an evacuation procedure (which should be tried and tested) meant that no-one at the premises could tell the brigade if anyone was left in the building. Read the rest of this entry