Episode Eight – Insurance: A Field Guide for Digital Agencies

𝗖𝗵𝗿𝗶𝘀 𝗦𝗶𝗺𝗺𝗮𝗻𝗰𝗲 

Hello everybody. Welcome to our latest webinar and as I promised everyone Omar Michael before I introduce you, I promised everyone before this that this will not be a boring insurance webinar. There will be smiles and laughs, so welcome Omar and Michael and Hope. I think I’ve got the names. Right way around. From the from the perspective of the US. So hopefully you got Omar on the left and Michael? 

𝗢𝗺𝗮𝗿 𝗔𝗸𝗿𝗮𝗺 

You have, yeah. 

𝗖𝗵𝗿𝗶𝘀 𝗦𝗶𝗺𝗺𝗮𝗻𝗰𝗲 

The right give us an intro, guys tell us who risk box are first of. 

𝗢𝗺𝗮𝗿 𝗔𝗸𝗿𝗮𝗺 

All. Yes. So I’m alma. I’ve worked in commercial insurance for the past six years or so. I joined risk box about a year and a half ago. My background is just general commercial insurance, but since working at risk box we focused specifically in the digital and creative industries. And tech and production and hospitality, all of fun, fun stuff, basically. So I think in the last year and a half, my life become less boring and more interesting, which is good working under Mike. 

𝗠𝗶𝗰𝗵𝗮𝗲𝗹 𝗛𝗲𝗻𝗱𝗲𝗿𝘀𝗼𝗻 

Lucky you. Yeah, wrist box. So set it up about 10 years ago. And our aim is to look after the types of business we like, which are your agencies, your tech companies, your entertainment, your media, the the fun stuff. So no disrespect to scaffolders and so forth that just not what we’re interested in. But we do it in a certain way. We’re completely independent. So we’re unlike. Some of the brokers we are not. Actually owned by insurers. Which you know, we question why. You recommend certain things. So we’re clear, independent and we try to take it from cradle to grave. So we don’t leave you to deal with things such as. Claims by yourself? We try to be proactive. If you got, you know, contracts and so forth, you need to help on insurance. Try to make sure we do. That so we tried to be there available. We tried to the end of. Either a video or a call or. Or whatever. And to make what is not just not exciting process, but what we’re pretty process cause we work in insurance and I know this is going out like we don’t trust. All insurers. So we need to make sure that the problems with. Service cover. You know insurers not necessarily doing what they. Should do. You don’t have. That we do that for you. And if we need to kick people, we will kick. Them for you so you do not have to. Them. So that’s pretty much. What we try to do. 

𝗖𝗵𝗿𝗶𝘀 𝗦𝗶𝗺𝗺𝗮𝗻𝗰𝗲 

Which is why you both look so useful. And full of life for people. Who sell insurance? So, you know, at least at least you got that going for you and I and. And I think that, you know, picking picking the industries that you work with is, is, is it’s important that in in any industries digital agencies we talk about this a lot like if you pick a certain. Segment. It makes it a lot better and easier to be experts and speak their language, but I can imagine, you know, if you do insurance for scaffolding firms and things like that. You’re. I mean, the rests are a teeny bit obvious in many senses. Falling scaffolding being one of them. And with digital and and media, it’s an awful lot more complex, I’m guessing because of the diff. Like one agency might have a totally different risk profile to another based on one integral part of the the business. So we should we, so we jump straight in and see see what we’ve got to to delight this wonderful audience with today. 

𝗢𝗺𝗮𝗿 𝗔𝗸𝗿𝗮𝗺 

Yeah, of course. Let’s go for it. 

𝗖𝗵𝗿𝗶𝘀 𝗦𝗶𝗺𝗺𝗮𝗻𝗰𝗲 

So I think the the, the when I was sort of canvassing for, for, for questions from people a few few weeks ago and there’s there’s a kind of a, I guess a core question of like what is the like, the absolute minimum stuff you need. So let’s assume this is a brand new. Digital agency or even actually someone who’s been running for 10 years and they’re like, well, actually do. I need that. What’s? The absolute must have. 

𝗢𝗺𝗮𝗿 𝗔𝗸𝗿𝗮𝗺 

Yeah, of course. So I I guess it’s worth starting by saying that there obviously many different types of insurance, many different types of insurance and digital things you should be aware of. But we understand it’s not really commercially viable to insure yourself against every exposure. So yeah, saying that there are some absolute must haves, we would recommend to all digital agencies. In freelancers, to be honest, the first of these, and probably the most important, is professional indemnity insurance. So this is designed to defend you and your agency for regular situations that could arise from the services you offer. So if you get sued, it will pay defence costs and if you do lose litigation, it. Will pay for. Damages and costs awarded against you. The core cover is in place to cover you against alleged negligence. Negligence and errors and omissions? That’s just the basic standard policy when we look for policies, particularly for agencies, we would look for cover for IP infringement as well, things like. 

Speaker 

𝗢𝗺𝗮𝗿 𝗔𝗸𝗿𝗮𝗺 

Commission breach of confidentiality. So, for example, if you’re a a a marketing agency, one of your staff members accidentally leaks a marketing campaign to leave on the train. Or something like that. You’re quite inevitably going to lose a lot of money. 

Speaker 

I want. 

𝗖𝗵𝗿𝗶𝘀 𝗦𝗶𝗺𝗺𝗮𝗻𝗰𝗲 

Money. I wonder what insurance the the the MP’s have given that that’s. 

Speaker 

Yeah, exactly, exactly. 

𝗢𝗺𝗮𝗿 𝗔𝗸𝗿𝗮𝗺 

Likely it is really wonderful in that end for sure. 

𝗖𝗵𝗿𝗶𝘀 𝗦𝗶𝗺𝗺𝗮𝗻𝗰𝗲 

It does what? What one? One thing I really quickly want to jump in on is you mentioned IP and you mentioned negligence and things like that. We had a a webinar recently with Steve Gunwitch. One of your colleagues in the in the legal end of the of the scale and it, it sounds like obviously they go those two things go hand in hand. But let’s say for arguments sake client comes to me and says you’ve reached intellectual property. Et cetera. I’m going to sue you. Do they go to the insurer first before they speak to the the lawyer, or do they go to the lawyer before they speak to the insurer? Or is there a it depends kind of. Part to this. 

𝗠𝗶𝗰𝗵𝗮𝗲𝗹 𝗛𝗲𝗻𝗱𝗲𝗿𝘀𝗼𝗻 

It’s as much as anything. It’s personal preference, so if they want the legal cost to be picked up then they need to. Go to the insurers. The insurers will generally have a panel of solicitors that they will use of a certain standard and at certain price, which they. Will approve now. That doesn’t mean so. For example, if you want to use so say you got Stevie K and you want to use him for your defence of an IP claim, then. 

𝗖𝗵𝗿𝗶𝘀 𝗦𝗶𝗺𝗺𝗮𝗻𝗰𝗲 

Which you should absolutely do because he’s an OMG partner. 

𝗠𝗶𝗰𝗵𝗮𝗲𝗹 𝗛𝗲𝗻𝗱𝗲𝗿𝘀𝗼𝗻 

He’s fantastic. He is fantastic. So you’d go to insurers, who would then? If he’s not on the panel, would. Ask some certain questions. But there’s every chance, depending on the insurer, that they would say, OK, well, yeah, we will do that. There might be some caveats or for example, they might pay a slightly lower fee to to the solicitor that you choose, but in theory, usually if they’re a decent solicitor it will be agreed to. And it’s just not guaranteed, because it’s Optum insurers in principle. 

𝗖𝗵𝗿𝗶𝘀 𝗦𝗶𝗺𝗺𝗮𝗻𝗰𝗲 

OK, so so professional indemnity kind of the key first must have what, what, what what else are we? OK, now. 

𝗢𝗺𝗮𝗿 𝗔𝗸𝗿𝗮𝗺 

So and before we move on another point of professional dental, that’s worth touching. On is it? Could this breach of contract as well? Not all standard Pi policies do. But again, when we’re looking for Pi policies for agencies, we would make sure it’s got breach of contract really and would encourage anyone to do the same when someone. 

Speaker 

To use you. 

𝗢𝗺𝗮𝗿 𝗔𝗸𝗿𝗮𝗺 

The more likely to sue you for breach of contract, it’s very black and white and it’s. A lot easier to prove. Yeah, if you’ve got an insurance policy that doesn’t include it, you could be left in a situation similar to not. Having insurance at all. So it’s a important point worth noting. 

𝗠𝗶𝗰𝗵𝗮𝗲𝗹 𝗛𝗲𝗻𝗱𝗲𝗿𝘀𝗼𝗻 

Yeah, you probably find there’s twice as many claims in total for bridge of contracts than there would be full of straight negligence now. If you were. Sued under contract for something where you would be seen as negligent. You would still be covered, whereas if you’re sued for something where you haven’t been negligent under breach of contract, you wouldn’t unless you have breach of contract cover. So with all my sort of saying that wider cover is very useful for this agencies where you will deal in, you know, specific deliverables on under a contract, you know agree to do this or we will agree to do that. And sometimes, for example, it might not be your fault that. You can’t deliver it, so you. You. Yeah. And I’ll say, yeah, your social media campaign, we agree to post 20 times a week, but we’re relying on the client to provide US content. Client doesn’t provide you the content, you don’t get to pull the 20 posts well, the contract doesn’t say that you’ve not done the 20 posts, therefore you. Breach your contract. So that’s the previous example, but that’s the sort of principle where you have not been negligent, you’ve done everything you possibly. Can and it’s. Your fault. But you could still be on the breach of contract because you. Haven’t done the black and white. 

𝗖𝗵𝗿𝗶𝘀 𝗦𝗶𝗺𝗺𝗮𝗻𝗰𝗲 

OK, so I mean. Not all Pi insurance uh policies are the same. So. The ones that that. A. A good one for a digital agency should really cover things like breach of contracts, IP’s, negligence, things like that then. Exactly. Yeah. Yeah. So anyone watching this? 

𝗠𝗶𝗰𝗵𝗮𝗲𝗹 𝗛𝗲𝗻𝗱𝗲𝗿𝘀𝗼𝗻 

And then it doesn’t. 

𝗖𝗵𝗿𝗶𝘀 𝗦𝗶𝗺𝗺𝗮𝗻𝗰𝗲 

Sorry. Go please. 

𝗠𝗶𝗰𝗵𝗮𝗲𝗹 𝗛𝗲𝗻𝗱𝗲𝗿𝘀𝗼𝗻 

It doesn’t. Generally, it doesn’t generally cost anymore to have that cover. It is just about picking the right insurer and picking the right cover. So like for example, if almost looking for for options they. Will all. Generally be with. Insurers who will do that, and if they’re not, that will be pointed out. 

𝗖𝗵𝗿𝗶𝘀 𝗦𝗶𝗺𝗺𝗮𝗻𝗰𝗲 

So one piece of advice I suppose specifically for agencies. If you’ve got a checklist as you’ve make listening to this this episode. Now if you look through your current Pi insurance and it doesn’t include things like negligence, breach of contract and. What was the other? IP infringement, then, then, then you need to have a chat and and try and work that one out for either the next one, the next policy, or to get it added to the current policy because it sounds like it’s not standard, but should definitely be digital agency standard for sure. 

Speaker 

I think. 

𝗢𝗺𝗮𝗿 𝗔𝗸𝗿𝗮𝗺 

Exactly. Yeah, you you’re paying for this product? At the end of the day. You’re not gonna know how good it is or. How well it works. Until you have the claim. So it’s just making sure that the product you’re paying for is meet your needs effectively. 

𝗖𝗵𝗿𝗶𝘀 𝗦𝗶𝗺𝗺𝗮𝗻𝗰𝗲 

Yeah. Yeah, makes sense. So that’s a definite bare minimum Pi. What, what? What is there anything? That’s like you can’t operate without. 

𝗢𝗺𝗮𝗿 𝗔𝗸𝗿𝗮𝗺 

Yeah. So we’ve got employers liability insurance and this is the only insurance that’s actually required by statute. So if you have any employees or you in charge of anyone who could be considered an employee. So interns, volunteers, even freelancers, you need employers liability. If you’re a limited company and you don’t have an employees, but you have more than one director, again you need it by statute by law. If you don’t have it, there’s a fine. I think you can get fined up to 2 1/2. Grand a day for not. Having it, which is obviously a lot of money and to be honest it’s it’s pretty inexpensive in comparison to other insurance. And on top of that. It can usually be packaged so a lot of these insurances we’re going to mention that can be packaged in what’s called a professional then need to combined. So at the centre of the product, as your professional indemnity and then you’ll package on things like your employees liability and the other bits. That we’re going to discuss as well. The actual cover employees liability, so it protects your agency against claims for injury to employees to pay for defence and depending on the circumstance settlement as well. 

𝗠𝗶𝗰𝗵𝗮𝗲𝗹 𝗛𝗲𝗻𝗱𝗲𝗿𝘀𝗼𝗻 

Yeah, so it’s quite interject as well as a good example cause sort of as Omar said, it covers it’s, it’s, it’s easy to know if you’ve got employees. Yeah, yeah. We’ve got employees we know we need. To do it. It’s also pretty easy to cheque if you’re a limited company. If you got more than one director dead easy where it’s a grey area is where you might be in control of someone who isn’t technically normally considered employee. You’re not paying them a salary. But you are in charge of their system of work. That’s where the grey area comes in. So if you’ve got a freelancer who’s working under your supervision, and we’ve had claims for this, where you’re, I know you’re doing a shoot and you’re telling to do XY&Z and you’re in charge of the health and safety. You’re in charge of where it is and how they’re doing it. That person gets in. Good. They can see you as an employee. Because you’re in. Control of the system of work and that’s the grey area. So if you’ve got a freelancer, you say, can you just do a Samsung graphic design off your goal? You do it in. Your own time. That isn’t an employee, but if you’re in control of how and when they do it, then under the legislation you can be considered to be an. An employer so quite often if if you’re not sure. It’s worth including and it costs buttons usually. 

𝗖𝗵𝗿𝗶𝘀 𝗦𝗶𝗺𝗺𝗮𝗻𝗰𝗲 

So just a point of clarification for my sense then. So let’s say talking. It’s a shoot like you say, you run the video agency your, it’s your camera, it’s your equipment, and it’s just you and it’s your business. And you’ve hired a A a casting company to send you people to act in, in an ad for a client. Would those people who work for the casting company come to your studio need to be covered under employers liability from your side? Or is that something? Is that why it’s a bit of a grey area? 

𝗠𝗶𝗰𝗵𝗮𝗲𝗹 𝗛𝗲𝗻𝗱𝗲𝗿𝘀𝗼𝗻 

That is exactly why it’s a bit of a grey area and something like that. If you’re in charge. Of what? That that talent is doing. So you’re gonna say you walk through that door, you go over this. Stuff you do this. Then you’re in charge of what they’re doing. So if they trip over the step you just told them to. Go over you’re. The one theoretically who will will be deemed as the employer and. It is a great area though. So quite often you’ll find that partly for agencies and so forth, they will also quite often have cover like that. But what you’ll also find is usually. Under a contract it will be. They will try to make it quite clear that when they are working for you on the shoot, you are doing the employer. Now, obviously contracts aren’t always there, but that’s sort of how it usually works. 

𝗖𝗵𝗿𝗶𝘀 𝗦𝗶𝗺𝗺𝗮𝗻𝗰𝗲 

1. That makes a lot more sense. I know it makes a lot of sense by not making. Sense but. I I get it. If you don’t get it when you’re watching ping as a note, Omar and Michael definitely understand it.

𝗢𝗺𝗮𝗿 𝗔𝗸𝗿𝗮𝗺 

Yeah. So the the next one, I mean the employers liability leads us quite nicely onto this. And this is public and product liability. So not too dissimilar from employers liability. It protects your agency against legal action. But this is from injury to third party or third party property as you guessed by the name there, there’s two. Sections to this there’s. Public and products. So for products most agent. These don’t have physical products. There’s minimal risk here. I mean, potential exposure could be stuff like your corporate merchandising or marketing material. But in honestly, how, how likely is that gonna cause injury to someone? Of course, if if your if your agency did have physical products, there’s a heightened risk here and it will depend massively. The products you have. The other side of it is public, so there’s a bit more risk here. But again, if if if you’ve got a digital agency only offering digital services, there’s a very minimal risk it could relate to things like if you were in a cafe and you spilled a drink on someone else’s laptop, damaged it if your charger trips them up and they hurt their knee. And I can liability. Will jump in, yeah. 

𝗖𝗵𝗿𝗶𝘀 𝗦𝗶𝗺𝗺𝗮𝗻𝗰𝗲 

Times were sat in a cafe and not even considered that I have been working. 

𝗢𝗺𝗮𝗿 𝗔𝗸𝗿𝗮𝗺 

Yeah, touchwood, but yeah, that’s where your public liability will jump in. I think a important point to note here is again similar to employees liability, it’s. It’s a relatively. Cheap and it tends to be a contractor requirement, so we see it a lot as a contractual requirement. And it’s worth noting so bigger companies asos, something like that. For example, they tend to ask for quite high limits. 10 million N of 10 million, and we would always recommend pushing back where possible. We think a most digital agency is a sufficient limit and. It’s two to. 5,000,000 and if you push back, they’ll usually meet you there and again it can be part of that package and it’s it’s pretty inexpensive. Yeah, yeah. 

𝗠𝗶𝗰𝗵𝗮𝗲𝗹 𝗛𝗲𝗻𝗱𝗲𝗿𝘀𝗼𝗻 

It’ll depend on what. You what you do as to what would be a reasonable limit to have, and it is still whatever. If it’s not under contract, it’s still finger in the air. If you’re a digital agency working in an office and you’re not doing anything, anything physical, then something like 2,000,000 is fine. If you’re a production company, you can go and do shoots or or you’re arranging. Events and so forth where you can control people. Then you need higher limits so that that will depend on on how you feel usually. And I saw them. I said sometimes you’ll be asked for ridiculous limit. And you can bounce that off your insurance provider sometimes as well, but where possible, we’d suggest negotiate something that’s reasonable, because if you’re gonna go and do a £500 graphic design job and they’re going to ask you to have 10 million public liability, that is bonkers. 

𝗖𝗵𝗿𝗶𝘀 𝗦𝗶𝗺𝗺𝗮𝗻𝗰𝗲 

Yeah, I I, I I remember about six or seven years ago now when we when we when I was running the agency we had. I think it was probably the largest client that we’ve ever had at that point and they said you need a a 10 million cap and and and I I wasn’t able to do that, I wasn’t the business wasn’t needing that. So and instead, we kind of negotiated a, a, a a meeting where essentially we did a a risk analysis. That that was how I negotiated them down to what our CAP was at the time. But you there’s lots of different ways you can negotiate with a a client, cause some. 

Speaker 

Yeah, yeah. 

𝗖𝗵𝗿𝗶𝘀 𝗦𝗶𝗺𝗺𝗮𝗻𝗰𝗲 

Times their legal team or their own sense. Sensible heads seem to have a A A cap that’s written in in stone internally somewhere. 

𝗠𝗶𝗰𝗵𝗮𝗲𝗹 𝗛𝗲𝗻𝗱𝗲𝗿𝘀𝗼𝗻 

Yeah, yeah, quite often. It’s a computer says no mindset of an individual who might be within the procurement. Part that, that happens a lot. But you’re right, you you. Will usually find at some point there is a sensible head, and what we’ve found as well is that even if you’re small and you’re working with the big boys. You can negotiate and quite often it seems to be you get a. Lot more respect by negotiating it, it’s actually the bigger ones that will say, OK, yeah, you’re only doing this. The contracts work that you’re not gonna be doing this. Fair enough. We’ll do that. Whereas sometimes it’s these smaller ones that just don’t sort of look outside that box. So it’s pretty random, I guess. 

Speaker 

Yeah, I think that. 

𝗢𝗺𝗮𝗿 𝗔𝗸𝗿𝗮𝗺 

They’ll just have one. Set of terms and conditions to send to everyone. So whether you’re a photographer taking pictures for them or you’re a contractor. Building for them, they’re gonna send an ask them the same limit, so it’s just pushing back and kind of trying to relate that obviously you don’t need that limit. 

𝗖𝗵𝗿𝗶𝘀 𝗦𝗶𝗺𝗺𝗮𝗻𝗰𝗲 

And one that one that I definitely want to sort of move along and talk about is uh, cyber and data insurance because that’s something that you guys talked to me about before we had this webinar and previously did that. I’d had just assumed that that was just the tip that was all rolled into everything else that you do as one. Of the the the three. Pieces that we just talked about. Is this completely separate? 

𝗢𝗺𝗮𝗿 𝗔𝗸𝗿𝗮𝗺 

Yeah. So similar to the liabilities, it can be packaged as part as your professional and entity dependent on the insurers, some insurers, we wouldn’t recommend going to for cyber and data. It’s still a relatively in the scheme of things, it’s still a relatively new product. Not all insurers are good at it. You can get it. The really cheap we. Want insurer but it could not. Be worth the the paper. Thretton there’s two main. Sides to cyber and data. You’ve got the data side and the cyber side. We’ll discuss the data element first. So you can think of data as effectively just information. So all agencies hold data. To be honest, the risk tends to be quite low. Depending on what you do, most agencies don’t hold a great deal of sensitive data. But we hear agencies all time. We don’t hold any. Data you do. Everyone would have data. It might even just be employees data. It might not be sensible. 

𝗖𝗵𝗿𝗶𝘀 𝗦𝗶𝗺𝗺𝗮𝗻𝗰𝗲 

It’s there, there’s there’s something somewhere, and I guarantee you’re if if you’re an agency that says you don’t have a look in your Google Drive or your Dropbox or your SharePoint and I you’re gonna find something. 

Speaker 

Is that you? 

𝗖𝗵𝗿𝗶𝘀 𝗦𝗶𝗺𝗺𝗮𝗻𝗰𝗲 

I was talking to an agency leader the other day and they were like, oh, no, no, the it’s all on the client stuff. We don’t have anything. We don’t hold anything ourselves. I was like, OK, cool. No worries. They were flicking through a few files and we were trying. To build a spreadsheet and. Got this spreadsheet book one I was like. I’ll just use that cause that you know it’s empty. Opened it up and it’s the entire client. CRM that that’s been. They didn’t even they didn’t even download it intentionally. It’s just. Yeah, that’s that’s I mean. Risk big risk. 

𝗢𝗺𝗮𝗿 𝗔𝗸𝗿𝗮𝗺 

Yeah, exactly. And if data leaks, I mean, you can find yourself in a situation where it’s it’s costing you and your agency a lot. I mean, there’s rules in place now, so you’d have to inform the ICAO the. Information information commissioners. Office. You’d have to notify. Those affected, if that’s 10,000 people, it could be a case of having to set up a. Self a call. Centre just to get and let everyone know that is. And information has been leaked. You’d have to pay fines as well quite hefty fines, as you can imagine, all of this is quite expensive. The data element of the insurer effectively covers your liability for this data we get agencies are going to have less exposure than, say, an e-commerce site that’s taking payment and holding card details. But there’s definitely still an exposure there. 

𝗠𝗶𝗰𝗵𝗮𝗲𝗹 𝗛𝗲𝗻𝗱𝗲𝗿𝘀𝗼𝗻 

Everyone’s gotta pull that list. Everyone has got a content list somewhere, but they they as as Omar is gonna lead on to in a second. The data part isn’t the big part anyway. GDPR does not say you need to have cyber and data insurance. But it’s still an important thing to have for the cops will have, particularly for the cyber bit, which armour will go about. Things such as like if you go for cyber essentials, they will give you some cyber and data insurance generally within what they you know what they provide. That is usually very, very low and it’s relatively restricted. There’s better than nothing, but it’s not necessarily what we would ever recommend. As a suitable. 

𝗖𝗵𝗿𝗶𝘀 𝗦𝗶𝗺𝗺𝗮𝗻𝗰𝗲 

See if you’re like a web developer then, or a well technical SEO person or something like that, and you have administrative level access on on a clients website and say they’re e-commerce or something. Like that, you’ve. Technically got a bit of risk there in the sense that you know you’re working on a website that may well. If through your actions or inactions become a a risk vector for for you know for data leakage or something like that, like similarly you accidentally download something you. 

𝗢𝗺𝗮𝗿 𝗔𝗸𝗿𝗮𝗺 

Yeah, exactly. Yeah. 

𝗖𝗵𝗿𝗶𝘀 𝗦𝗶𝗺𝗺𝗮𝗻𝗰𝗲 

Shouldn’t do maybe. 

𝗢𝗺𝗮𝗿 𝗔𝗸𝗿𝗮𝗺 

Yeah, exactly. And they’re effectively just those if you have access to another system, they can just jump in system to system and before you know it, they’ve got control of so much data and access to systems. So like Mike mentioned, where we see the biggest exposure for for a lot of agencies and all of our clients to be honest. Is under the cyber side, so the cyber side it’s probably best to use an example here and would you use ransomware cause we’re seeing it in the news all the time at the moment. So Hacker gets out of your system, locks you out your system. You can’t access anything. You can’t access your emails, you can’t access any any of your data, any of your information. And they turn around and ask for two Bitcoin to to free up your system. This cyber insurance will step in. So initially they’ll provide professionals to investigate the attack and actually find out it’s credible. They’ll do research on the hackers cause these these hackers are communities of people who tend to stick true to the world, and you pay the ransom. They might actually give you a system back. There’s even circumstances where they’ll tell you kind of the holes in your system and help. You going forward? But it’s if you pay this ransom, then insurers will provide things like digital forensic teams that try to gain access to your system or repair your system. If all else fails, they’ll even. Provide negotiators to negotiate the criminals and pay or reimburse the money we say pay and reimburse cause it’s a very grey area. At the moment, insurers don’t wanna be seeing paying hackers ransoms because it’s just going to encourage more hackers. But also they can’t. Not because if you’re locked out your system for six months. The cost is going to be. Way more than the ransom. 

𝗠𝗶𝗰𝗵𝗮𝗲𝗹 𝗛𝗲𝗻𝗱𝗲𝗿𝘀𝗼𝗻 

Yeah. The two, the two core benefits of it is one, obviously it pays for things such as Omar said, it can pay for the ransom, it can pay for your, your business in shops, there’s the monetary. Element there, but then there’s the other element which is the. Hassle the stress, the pain of a situation like that. It’s the I’ve I’ve had calls where someone phoned up in tears saying my business is over. We’ve got, you know, we’ve been demanded £50,000 to pay this we we haven’t got it. I’m an e-commerce company and it’s like. Do you know Black Friday? Tomorrow? What do? We do. And with the good insurance people, you know, if you get the right ones, they’ve. Got effects like a cyber SAS. They parachute them in metaphorically, of course, and they will pick it up and they will do exactly what Omar said. They will find out what’s happened, how it’s happened, what’s affected. 

Speaker 

Yeah, yeah, yeah. 

𝗠𝗶𝗰𝗵𝗮𝗲𝗹 𝗛𝗲𝗻𝗱𝗲𝗿𝘀𝗼𝗻 

Is this a credible threat? Are there ransom that you know are these ransom people who are likely to stick to their word? And if you pay them, you will actually get it, you know, get your. Assistance back or other ones that aren’t going to, and you’re gonna just pay something that’s gonna disappear. But as Omar has also said at the moment, at the moment ransoms can be paid, albeit through different channels. One day it will. Not be one day will not be the case as legislation going through the US at the moment as soon. As they find it’s. Illegal to pay around some then obviously that will change. And at which point you’ll probably find every single. They’re around the world, we’ll say we’re no longer. Doing it. Because it’s we’re seeing this funding terrorism. 

𝗖𝗵𝗿𝗶𝘀 𝗦𝗶𝗺𝗺𝗮𝗻𝗰𝗲 

Yeah, and and quite a lot of insurance companies. Now this is obviously going down a rabbit hole that we don’t want to do, cause we we haven’t got a huge amount more time, but quite a lot of insurance companies are reinsured by other firms and quite a lot of those reinsurance firms act like completely globally as a as organisations. So they’ll follow where the biggest money is, I guess so. If the US makes that rule, then the reinsurance companies will enforce that rule and then the insurance firms have to enforce that rule and no one gets paid then. 

𝗠𝗶𝗰𝗵𝗮𝗲𝗹 𝗛𝗲𝗻𝗱𝗲𝗿𝘀𝗼𝗻 

And a lot of the insurers in the UK are US insurers. Your jobs, your IG, your travellers. They’re all Beasley. They’re all you know. They’re the the, the US, generally U.S. companies that have. 

𝗖𝗵𝗿𝗶𝘀 𝗦𝗶𝗺𝗺𝗮𝗻𝗰𝗲 

Speaking Speaking of that. On it from an international point of view. Is it necessary? If you’re a UK company that runs a UK agency that works with UK companies that work internationally? Is it different? That? Is it a different kind of insurance? You’d have to have than if you worked across international clients as well? 

𝗢𝗺𝗮𝗿 𝗔𝗸𝗿𝗮𝗺 

So we’re working across international clients is there’s two things you really need to consider. 

Speaker 

Right. 

𝗢𝗺𝗮𝗿 𝗔𝗸𝗿𝗮𝗺 

In your insurance policy. There’s there’s there’s two sections. You’ve got your territorial limits and your territorial limits is effectively. Where the clients? You’re working with are based and to be. Honest nine times. Of 10, most insurers offer worldwide their standard, and if not, I’d advise contacting them, cause it’s affected at the same price. Occasionally we do see when clients have gone direct to ensure they’ll restrict it to the UK, so we would pay attention. But nine times out of tenants worldwide are standard. I think the sticking point when dealing with international clients is your jurisdictional limit. So jurisdictional limit relates to where disputes. Would be tried. So most policies similar to the territorial are usually worldwide. It’s as standard, but specifically exclude the USA and Canada’s reason for this is. The litigious cultures out there, they like to sue. They have things like punitive damages. Litigation tends to cost a lot more out. There tends to be a lot longer, and there’s just a lot more of. It there’s it’s. It’s part of the culture. If you are asked by. A client to engage under US or Canadian contract in first instance would again similar to the higher limits. And always advise pushing back where possible. We understand this isn’t always possible when not possible. You’d have to tell your insurer and kind of add it back into the policy. Extend the policy which does tend to cost extra, especially if it’s a large contract. It can cost significantly extra and insurers will need a fair amount of traditional information, so they might wanna know specifically what that contract’s providing the amount of the contract. Occasionally they might even wanna see the contract. Another thing worth noting here, especially kind of. Touching on what we touched on earlier and whether it’s kind of financially viable, most contracts. So if you were to sign a contract with a large U.S. company and they wanna try it on the US court. If a dispute were to happen, they might also stipulate in the contract that you have to keep it under US jurisdiction for the. Next six years. So that’s obviously going to be. You’re gonna need to take that into account when pricing the policy going forward and kind of. Pricing for your tender effectively. 

𝗖𝗵𝗿𝗶𝘀 𝗦𝗶𝗺𝗺𝗮𝗻𝗰𝗲 

Yeah, and. And I guess that almost that could change mid policy as well, right. So you do some good marketing during the year and all of a sudden you you’ve got a uh tender out that that may be require you need. So I I wish I’d. Just known you guys a long time ago, and because there’s, there’s. Times when you don’t realise that actually it’s a bit like you’ve got car insurance and had no something happens over the course of the year and it’s not like you’ve changed the car completely, but something fundamentally changed on the car like you’ve added an aftermarket part and you don’t think. 

𝗢𝗺𝗮𝗿 𝗔𝗸𝗿𝗮𝗺 

Right, yeah. 

𝗖𝗵𝗿𝗶𝘀 𝗦𝗶𝗺𝗺𝗮𝗻𝗰𝗲 

Call the the insurance company. Let them know that there’s some obnoxious exhaust or something on there. 

𝗠𝗶𝗰𝗵𝗮𝗲𝗹 𝗛𝗲𝗻𝗱𝗲𝗿𝘀𝗼𝗻 

Yeah, the the worst situations we find are when someone has signed a big contract and not told us quite often the the terms of the contract might be unreasonable, but if you’ve signed it, you’ve signed it. Whereas if they same as you’d go to a solicitor in the negotiation side, you come to your insurance broker who says that’s not a reasonable amount to have. Insurers wouldn’t agree to this clause. This will cost you extra for this you have to bear that in mind when budgeting it and when when negotiating. So it is always worth speaking to. Whoever arranges you. Insurance. When it comes to any big contract. Yeah, particularly anything to do with the US or Canada that should be like. The big red flag. 

𝗢𝗺𝗮𝗿 𝗔𝗸𝗿𝗮𝗺 

Yeah, and not to sound like a broken record, but nine times out of 10, you can push back if you’ve already signed it, then you’ve kind of just signed. Away that ability to. Push back. They’re never gonna accept lower terms after you’ve signed the contract, so. Again, just to reiterate what Mike said, it’s always worth just chatting to chatting to whoever organises your insurance before you kind of engage in any large contract. 

𝗠𝗶𝗰𝗵𝗮𝗲𝗹 𝗛𝗲𝗻𝗱𝗲𝗿𝘀𝗼𝗻 

The geographical limits which allow you to work with where your clients. Based and then you got the jurisdiction limits which the second part almost mentioned, and that’s the Court of Law, which is specified in the contract. She could deal with the US company and the UK jurisdiction and probably not have to change your insurance at all. At the moment it is US or Canada jurisdiction. That’s when things become more expensive. That’s when. Yeah, things have to, you know, policies have to be amended. 

𝗖𝗵𝗿𝗶𝘀 𝗦𝗶𝗺𝗺𝗮𝗻𝗰𝗲 

You know, I I this isn’t a plug for. Risk box except. It kind of is, but I don’t think you get this kind of awareness or attention to these kinds of things with a generalist supplier, right and? 

𝗢𝗺𝗮𝗿 𝗔𝗸𝗿𝗮𝗺 

Yes. So if you go direct to an. Insurer we, we find that, I mean they’re. Not allowed to advise you. So you kind of miss out on things like this left. Right and centre. And other brokers will. Be able to advise you and stuff. Like this, but they might not specifically have knowledge of agencies, but yeah, this is kind of our bread and. Butter. This is what we do, yeah. 

𝗠𝗶𝗰𝗵𝗮𝗲𝗹 𝗛𝗲𝗻𝗱𝗲𝗿𝘀𝗼𝗻 

You would be better off being with a bad generalist broker than going direct. Never ever ever go direct your agency’s insurance. Don’t do it. Even if it’s someone you know not mentioning a certain well known direct insurer who every single time you come against their come across their policies, they’ve done direct, have restricted all the covers. 

𝗢𝗺𝗮𝗿 𝗔𝗸𝗿𝗮𝗺 

Does it make sense? 

𝗠𝗶𝗰𝗵𝗮𝗲𝗹 𝗛𝗲𝗻𝗱𝗲𝗿𝘀𝗼𝗻 

Quite often they’re far more expensive. They’ve removed things. Yeah, they have gone through the worst broke in the UK. The cover would have been far better. 

𝗢𝗺𝗮𝗿 𝗔𝗸𝗿𝗮𝗺 

And probably cheaper. There’s no extra cost to go for a broker. It just. 

𝗖𝗵𝗿𝗶𝘀 𝗦𝗶𝗺𝗺𝗮𝗻𝗰𝗲 

Well, yeah. Well that that’s that. 

𝗢𝗺𝗮𝗿 𝗔𝗸𝗿𝗮𝗺 

Makes makes no. 

𝗖𝗵𝗿𝗶𝘀 𝗦𝗶𝗺𝗺𝗮𝗻𝗰𝗲 

That that bet everyone hopefully knows or should know, and questions come through on Twitter from May. Is there such thing as a no claims bonus for insurance like this? We’ve been going for 10 years and not claimed once. I’m guessing. May is suggesting that maybe the policy should be cheaper. 

𝗢𝗺𝗮𝗿 𝗔𝗸𝗿𝗮𝗺 

No. Yes. So no claims bonus itself. Effectively specific to car insurance and then some other personal insurance home insurance, you don’t get a set, no claims bonus, but I guess one thing. We would say. So if you’d claim 10 times in the last 10 years, your policy wouldn’t be what it is now. They don’t tend to give you a massive discount for not claiming. But they will negatively impact your premium if you do claim. So again it’s it’s another good reason to have a broker rather than going direct to the insurer, cause when it can take the peak. 

𝗠𝗶𝗰𝗵𝗮𝗲𝗹 𝗛𝗲𝗻𝗱𝗲𝗿𝘀𝗼𝗻 

They will, yeah. In commercial insurance. There are all sorts of different things that people might say. You’ll get discounts for. You have a discount for an alarm, or you might have discounts for being cyber essentials you might have. That’s rubbish. Insurers will choose the price that they want to, and they will put lots of different factors in if they can reduce it for 10% for, say, having a decent security system, they can reduce it to 10. Percent anyway. It’s not. There is nothing there that is absolutely set and we’ll have it still. Comes down to an underwriter’s decision. So it’s not strictly true. It’s a bit of smoke and a bit of mirrors. 

𝗖𝗵𝗿𝗶𝘀 𝗦𝗶𝗺𝗺𝗮𝗻𝗰𝗲 

So mentioned in the underwriter bit, that’s something I’ve always wanted to understand is that an actual human being? Because I can’t. There’s there’s 3000 businesses in the UK all needing insurance, not people having to read them. 

Speaker 

Well, funny enough. 

𝗖𝗵𝗿𝗶𝘀 𝗦𝗶𝗺𝗺𝗮𝗻𝗰𝗲 

That’s a. 

𝗢𝗺𝗮𝗿 𝗔𝗸𝗿𝗮𝗺 

Funnily enough, Mike used to be a be underwriter, so he’s probably the best person to speak. 

𝗠𝗶𝗰𝗵𝗮𝗲𝗹 𝗛𝗲𝗻𝗱𝗲𝗿𝘀𝗼𝗻 

To my human being. 

𝗖𝗵𝗿𝗶𝘀 𝗦𝗶𝗺𝗺𝗮𝗻𝗰𝗲 

He must have to be a robot. 

𝗠𝗶𝗰𝗵𝗮𝗲𝗹 𝗛𝗲𝗻𝗱𝗲𝗿𝘀𝗼𝗻 

I’m an algorithm now, so you’ll you’ll find that there there is. A move towards. More AI generated to the sponsors and so forth from insurers. What I would suggest is that eventually you will find. That AI will. Do a lot more, but at the moment what you’ll find is a lot of insurers have taken steps a little bit too quickly. So whereas you used to have people who could understand risks, understand. And you know, particular things about an agency or what they’re doing. You struggle now to find that, which means that service is a lot slower for a. Lot of things. Because they put processes in place, is in process services in people who process rather than have the particular skills of underwriter. So just jump the gun. We find. 

𝗢𝗺𝗮𝗿 𝗔𝗸𝗿𝗮𝗺 

But I I think this might be going a bit off. Topic but for. Us insurance is a very kind of people person’s job. It for us, it’s about the relationship to having that relationship. With the underwriter. One day we might give them a custom of the company that’s very light risk and they’re happy with us. The next day we might come with someone who’s producing parts for a car and they don’t wanna do it, but we’ll lean on the relationship we. Have with. Them to kind of get there and. Pick it up and achieve the result. 

𝗖𝗵𝗿𝗶𝘀 𝗦𝗶𝗺𝗺𝗮𝗻𝗰𝗲 

That makes sense and it’s it. And and it’s nice to know that the insurance game is a people person game to a degree, because I worked for an insurance company. We did, we did some digital marketing for them once. They were not people people and I’m glad to hear that there are people, people. In your in your industry. But. 

𝗢𝗺𝗮𝗿 𝗔𝗸𝗿𝗮𝗺 

We try and. Stick as much them as possible. Like Mike says, there’s. A lot of yes and Nos. And computer says Nos Frank. 

𝗠𝗶𝗰𝗵𝗮𝗲𝗹 𝗛𝗲𝗻𝗱𝗲𝗿𝘀𝗼𝗻 

Yeah, they try and protect you from the computer, says know. Having to go through, you know, stupid chat bots that don’t work because they’re not fit for purpose. 

Speaker 

1. I know.

𝗠𝗶𝗰𝗵𝗮𝗲𝗹 𝗛𝗲𝗻𝗱𝗲𝗿𝘀𝗼𝗻 

Rather good chat bots you might get on other things. They are generally awful, but we will protect you through that. And we will obviously lead you to ensure. So you’ll always get to speak to a. Person with us, whatever the situation. 

𝗖𝗵𝗿𝗶𝘀 𝗦𝗶𝗺𝗺𝗮𝗻𝗰𝗲 

So last little bit of the webinar, I really wanted to ask these questions. Have you got any horror stories? 

𝗠𝗶𝗰𝗵𝗮𝗲𝗹 𝗛𝗲𝗻𝗱𝗲𝗿𝘀𝗼𝗻 

We’re not going to say this for. Halloween. Then we’ll read. We’ve we’ve got the the story that Omar. Went through about the the ransomware, that’s true. We’ve also had, you know, we’ve had clients who’ve they’ve, they’ve been arranging payment of services on behalf of one of their clients and they didn’t realise that someone has hacked their systems. And then at some point, they say, can you pay this invoice? Both sides of this systems are frozen, hacking interjects within the stream of communication, so it’s not a. New e-mail it says oops by the way. It’s the wrong account. Here’s the right account. Bangos 50 grand straight out thing went to Turkey and then it went somewhere else, but obviously that money’s gone. Fortunately, they were insured, but if they weren’t then that would have been an expensive mistake to make. Yeah, most of most of the stuff that we see, most of the issues we see will be on things such as the professional demity side. That’s where most of the the claims the the bigger, more complicated ones happen. I suppose the most common theme is. Either either miscommunication, as in the client not understanding what the agency’s going to. Deliver or. The client not wanting to pay what the agency delivers, and as soon as you chase for that final payment, they might decide to find any spurious reason they can to. 

𝗖𝗵𝗿𝗶𝘀 𝗦𝗶𝗺𝗺𝗮𝗻𝗰𝗲 

And this this kind of, I mean, all of this ties together when you’re running a digital agency. But if you’re managing the clients expectations properly, hopefully you have those kinds of problems less frequently, and if you’ve made it clear that your payment terms are this and your deliverables are that and and you don’t kind of necessarily guarantee specific results and things, those kinds of problems are. 

Speaker 

Yeah, sorry. 

𝗖𝗵𝗿𝗶𝘀 𝗦𝗶𝗺𝗺𝗮𝗻𝗰𝗲 

Less likely to happen so for a client it’s not gonna say you’ve broken contracts because you didn’t say we’ll get you a million sales this year. 

𝗠𝗶𝗰𝗵𝗮𝗲𝗹 𝗛𝗲𝗻𝗱𝗲𝗿𝘀𝗼𝗻 

Yeah. And I suppose that the big key is, is, is there an agency out there? That’s never had a bad client. You know what? 

𝗖𝗵𝗿𝗶𝘀 𝗦𝗶𝗺𝗺𝗮𝗻𝗰𝗲 

An awful lot of insured bad agencies as well, and that’s part of the OMG centres mission there. 

𝗠𝗶𝗰𝗵𝗮𝗲𝗹 𝗛𝗲𝗻𝗱𝗲𝗿𝘀𝗼𝗻 

Yeah, there, there, there are. There are you mean we’ve got. We’ve we’ve seen agencies that agreed to lots of different contracts now that they can’t deliver it. And some of them have got paid out on their insurance when you know, technically they should do morally. Maybe not. So it there’s there’s all sorts of different variables, but taking in sort of back to the the sort. Of the example where. There’s the client that does not want to pay you. 

Speaker 

Had one wearer. 

𝗠𝗶𝗰𝗵𝗮𝗲𝗹 𝗛𝗲𝗻𝗱𝗲𝗿𝘀𝗼𝗻 

A website was produced. It was an e-commerce website. The client did want to pay the last invoice, so they made all these different things up, saying that they don’t want to pay because of this. This and that ended up being. Over 200 grand, that claim, and because of some technicalities, and the thing was the the website that was produced was still being used with the same code, bearing in mind it. Was unusable to. Yeah, that’s the sort of thing that unfortunately agencies have to deal with. Because there are clients. Out there like that. Around saying, here’s a list of all the the red flag clients that you’re not allowed to deal with cause they don’t pay and they complain about this because you know you’re getting to for defamation. 

Speaker 

Yeah. Yeah and. 

𝗖𝗵𝗿𝗶𝘀 𝗦𝗶𝗺𝗺𝗮𝗻𝗰𝗲 

So on the other side of the fence, then you must have spoken in the past to agencies that. Either didn’t give enough or give the correct information through, not necessarily negligence, but just not necessarily having the bandwidth to give the right information over is there. Is there kind of a bit of a leeway if you sort of say, I don’t know the question around what’s your revenue per year and you say 300,000 and actually it’s 500,000, is there a kind of leeway around that? What stuff? Or? Have you ever had to go? I’m sorry. Your insurance is null and void because you accidentally made a mistake. 

𝗢𝗺𝗮𝗿 𝗔𝗸𝗿𝗮𝗺 

Yeah. Again, not to not to go back to to what we’ve mentioned before, but This is why it’s always useful to have a broker rather than go direct to an insurance. If you go direct to insure. Or would like to think not, but they’re gonna take advantage of you. Financials do tend to be estimates. So with your liabilities, they’re gonna want estimates for the following year. There’s. Room there. You don’t. You don’t have to. Be exact and then with professional. Indemnity. They usually want your achieved financials. That could be from two years ago. If you’ve not received. Your account yet? There’s always room, though, if even at the end of the policy, if it turns out that your premiums been different, insurers could just look to increase or decrease it. 

𝗠𝗶𝗰𝗵𝗮𝗲𝗹 𝗛𝗲𝗻𝗱𝗲𝗿𝘀𝗼𝗻 

Yeah, it would as. A basic sort of rule of thumb you’d need to be reasonable. You’re not going to know what contracts you’re gonna win. You’re not gonna know what contracts you’re going to lose. You’re not gonna know if something gonna pick up. Plants in the. US if you want for or what we’d say is if there’s ever a step change or let your insurer or you’re broken up. So if you’ve never dealt with US clients and sudden. You do tell your insurer, yeah. Or if you like. To I don’t know, you’re predicted to do 250 grand turnover and all of a sudden you’ve got a contract that’s going to travel it speak, you know, speak your insurers then. 

𝗖𝗵𝗿𝗶𝘀 𝗦𝗶𝗺𝗺𝗮𝗻𝗰𝗲 

So if if if we wrap it, wrap things up somewhat, cause I know this could be like an entire day thing, I know it could be. Because I guarantee, based on everything I’ve I’ve heard from you guys, that this is the surface. But. Scratched and but to to to to kind of wrap things up. What kind? What one piece of advice is a takeaway would both of you guys give one piece of advice each? I’m an agency owner and I’m waiting to hear Omar’s bit of advice. 

𝗢𝗺𝗮𝗿 𝗔𝗸𝗿𝗮𝗺 

Yeah, my advice simple. As I’ve mentioned, at engage with a broker doesn’t have to be as engage with a broker. Don’t go direct to insure. Just speak to a professional. It’s gonna cost you no extra. Occasionally it will be cheaper and they’re gonna be able to give you advice and help you along your journey again. Don’t have to be us, but just whatever you do, don’t get directly insured. It it makes no sense. 

𝗠𝗶𝗰𝗵𝗮𝗲𝗹 𝗛𝗲𝗻𝗱𝗲𝗿𝘀𝗼𝗻 

Yeah, that’s sort of echo that. So what I would say is if you what’s a claim for insurance? Direct and the insurer says it’s not covered. Because of this clause. How do you know? You’re right, how do? You know that that that is correct. How do you know? And that’s where even a bad broker should be able to step in. You know that that they are. They are supposed to be there to be able to say, well, actually, no, that is not the case. 

Speaker 

𝗠𝗶𝗰𝗵𝗮𝗲𝗹 𝗛𝗲𝗻𝗱𝗲𝗿𝘀𝗼𝗻 

That is not reasonable to to decline a claim for that. And that’s exactly why you don’t want to. Go direct. 

𝗖𝗵𝗿𝗶𝘀 𝗦𝗶𝗺𝗺𝗮𝗻𝗰𝗲 

Brilliant advice. I’m so glad you guys came on and and and I think that there’s quite a lot that quite a lot to take away and we’ll probably get a few questions in the next next few weeks as people Digest this because it’s it’s very complex when you’re already got a very busy mind on your own business. So it’s makes sense to work with people that. Actually kind of get it. So thanks so much for coming along guys. It’s been really great having. 

Speaker 

Yeah, of course. 

𝗠𝗶𝗰𝗵𝗮𝗲𝗹 𝗛𝗲𝗻𝗱𝗲𝗿𝘀𝗼𝗻 

No worries. Just yes, thank you. 

𝗖𝗵𝗿𝗶𝘀 𝗦𝗶𝗺𝗺𝗮𝗻𝗰𝗲 

And in the next webinar, which is on the 13th of April, we’ve got Charlie and Deborah from the HR department. We’re gonna be talking about the employment landscape, similarly to to insurance. It’s a bit difficult to get right and it’s something that. I think all digital agencies really need to get to grips with, especially if you’ve got staff, but if you’re ever thinking of getting staff as well. So thanks very much and enjoy the outro music.