28 | AIPP ADVICE WORDS |Mark Sharp
BUSINESS
www.opp.org.uk | APRIL 2011
Cover yourself now
The UK is becoming more and more litigious, and there is an increasing need to make sure you are adequately insured. Some professions have a legal obligation to use professional indemnity insurance, but there are other types of cover that you might not deem essential for your business. Mark Sharp explains how important it is to to ge the right sort of cover.
insurance. Isn’t it infuriating that everyone else on the road is an idiot when you have maximum no claims bonus and haven’t had an accident for years! Perhaps it would be worth remembering that there are, however, more than 1.5 million car accidents a year in the UK with more than 3,500 people killed. All of a sudden car insurance feels a bit more necessary doesn’t it?
T Running your business is a massive
here is nothing worse than paying for something that you rarely use, such as car
undertaking ... you work hard, and you worry about how successful you are and how much money you are making. Given all these things it would make sense that you would want to protect the thing that you have worked so hard to build up. The key here is to understand the importance you place on your
“Could you afford to pay compensation to a consumer should anything happen to them whilst on their inspection trip?”
business in two ways: fi rst, it is about protecting your business and secondly about using the fact that you are insured as a marketing/sales tool to clients. It does of course depend on the type of insurances you undertake.
The reality of the overseas property market is that, unjustly in the majority of cases, we suffer from an appalling negative image. Attracting all the worst bits of image from a) the UK contractor / developer (although believe it or not there was a time when tradesmen were very highly regarded and used to go to work in collar and tie) and b) the reputation of the UK estate agent. These are not images that leave a positive impression with consumers; so it is down to those of us who work in the industry to make the difference. The most important means of doing this is to give confi dence to the consumer. Carrying adequate professional indemnity insurance is a way of killing two birds with one stone. It gives you the peace of mind of knowing that if something goes wrong you will not necessarily lose your business, and it is an excellent sales tool for you
to use with clients. Reassurance is a key perception for consumers when undertaking to buy property overseas. Other types of insurance may not
be quite so obvious at the moment but they are just as important. How about viewing trip insurance? If you book viewing trips with more than two elements (fl ights, hotel, car etc.) you have to be insured to do so, as this is not covered by your ordinary business insurance and is a legal requirement. As many of us have bought new
properties from developers in the UK, we have had the luxury of the NHBC guarantee that will rectify structural faults for 10 years. Again this is an insurance product that is available to new homes overseas that the AIPP can provide on a project-by-project basis or can qualify developers to include this cover on all their developments. This is a fantastic sales tool and gives further re- assurance to the consumer: if their home develops a structural fault, they can have it repaired as part of their package. So far it has been identifi ed that you need insurance to protect your business. There are also packages available to enhance your business but the question of cost is always a contentious one. However, perhaps a slightly different perspective to this is “What if I don’t have these things in place?” You may go for 20 years and provide a good professional service with many satisfi ed clients, but what about the one client who isn’t going to be happy no matter what you do? Not to have that PI insurance is a high-risk strategy – in an industry where the image is poor, it would make better business sense to be insured. Could you afford to pay the compensation to a consumer should anything happen to them whilst on their
Professor Mark Sharp is the chief executive of AIPP. He has more than 14 years of board level experience in the international property industry. Visit AIPP at:
www.aipp.org.uk
inspection trip? Could you afford to carry out repairs on a development you left 10 years ago? Think of the cost differentiation between prices in 2001 and now. The AIPP is able to provide this insurance and we have a range of policies available depending on how many viewing trips you provide a year. We have already agreed a 30% discount for AIPP members, and we are also able to provide for non-AIPP members as we consider it important for the industry to be adequately insured. This assurance will have a two-fold
“In an industry like ours, where the public image is poor, it would make better business sense to be insured”
effect. First, it will give your business the benefi t of competitive advantage and secondly, it will enhance the whole public perception of our industry. All these products are available
from the AIPP now, or will be shortly. We are working hard to make the industry a better place to live, work and build a successful business in, by providing you with the opportunity to flourish even in the present market conditions. No business is too big or too small
to take advantage of the difference we are making.
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