The pain of GDPR compliance and the long term effects
GDPR has no exemptions that organisations I work with can rely on, perhaps for the first time with data, we are all in it together.
The challenges facing organisations trying to comply are magnified by the amount of “fake news” surrounding it. I haven’t been surprised by the feeding frenzy from those trying to cash in yet I am somewhat alarmed by the number of “experts” on this untried legislation. I understood that it took 10,000 hours to become an expert in something and I’m wondering how the experts managed that. C’est la vie.
What truly concerns me is that this is a massive cultural change and I fear that the policies being written and disseminated are not going to empower the people that need to deal with data on a daily basis. During my 29 years in the field of risk, insurance and business continuity I have seen many issues that could have been avoided by educating people. Yet it seems that policies are written to ensure employment or contracts can be terminated rather than actually encouraging people to comply. I realise that this is partly due to legal precedent yet motivating people by fear is far weaker than motivating them by other means.
Having listened to many people and taking in copious amounts of information, I think that the feeding frenzy has prevented people from understanding the “mission” of the data regulators. They want organisations to be careful with data and respect the wishes and privacy of people like you and I. It is not a lot to ask yet achieving that aim is undoubtedly awkward. It is a lot less awkward if the culture of an organisation recognises this.
I have this awful nagging doubt that people will not be motivated to do the right data thing if they are told off or, disciplined when they make mistakes. I’ve seen many policies that tell people what to do yet they are rarely allied with the cultural piece. Even rarer is the right level of education and reinforcement that motivates.
The deadline will come and go yet the mission of the regulator is not going to be achieved if the culture of blame continues to be the most pervasive in organisations. One issue that no-one seems to have thought about is the way salespeople treat data. Arguments over who owns it are regular, especially with the advance of online networks. Roughly 50% of people take data with them when they leave one organisation for another. There are at least two companies in breach when this happens and the individual has broken the law. It is theft after all.
The existing regulations state that this shouldn’t happen yet half of the population think it’s OK to take it when they really know that they shouldn’t. It could be argued that the policies that discipline people have worked because they have stopped the other half from doing this. Yet half is not enough. It should be a single digit number, at the very worst.
So policies and procedures are not working now. New ones will not change that if they don’t address the cultural side of human behaviour.
What can be done?
A new type of policy is required. Naturally, it should start at the top of an organisation. It should motivate people to change the way they think about data. It should be readable, not shrouded in jargon. It should reward people for doing the right thing. It should be something that everyone is reminded about. But not “beaten up” over.
Jason Cobine is an Insurance broker in London who works with businesses and charities. He has built a business from scratch, without pilfering data so he knows how hard it is. Yet it was a cultural decision that has been proved to be correct.
Contracts, Consultants and indemnity
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.
Efficient insurance isn’t always friendly
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”.
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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.
Advisers “advice” drops client in it
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.
I know who did it
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?
Will Intellectual Property lead the UK out of recession?
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.
