Archive for year: 2014

The Financial Conduct Authority has released their Consultation paper, Guaranteed
Asset Protection Insurance: A Competition Remedy. Part of their proposals are to limit
the point-of-sale offer of GAP insurance when product is sold by a dealer or distributor of
motor vehicles.

The FCA intends for the new rules to come into force in September 2015.
The FCA’s key proposals for motor dealers who wish to sell GAP Insurance are:-
 to provide information that will encourage customers to shop around;
 to advise customer’s that they can purchase GAP Insurance elsewhere;
 to introduce a deferred opt-in or break in the sale, whereby a dealership’s salesperson can start the sales
process but cannot conclude the sale for a defined period of time. Allowing customers time to consider
whether the product is of benefit to them and provide the opportunity to shop.

The FCA said it wants to promote competition in the £160 million guaranteed asset protection (GAP) insurance
market, including limiting the point of sale advantage for GAP sales made on the vehicle showroom floor and
making it easier for consumers to explore alternative options available to them.
GAP insurance is usually offered alongside car sales. The study found that consumers were often buying without
having previously considered the product or shopping around for alternatives, concluding were customers getting
the best deal.

Christopher Woolard, director of policy, risk and research at the FCA, said: “Earlier this year we said that firms must
put consumers’ interests first. It’s important that people are able to make informed decisions about whether they
need GAP, and if they do, the best place to buy it.”

“Today’s proposed rules are intended to help consumers from paying too much for a product that may not be
offering good value for money.”

This would indicate that consumers are buying products that offer poor value for money, the monopoly that motor
dealers enjoy puts them in a very strong position. With little competition at point of sale there is no pressure on
motor dealers to reduce price.

This is in stark contrast to GAP insurance sold via an insurance broker where the FCA has confirmed:- “Where
GAP insurance is not sold as part of a motor vehicle sale, we propose that these sales should be excluded from the
new requirements. For example, if GAP insurance is sold as an add-on to motor insurance (and not sold at the
same time as the motor vehicle) then we propose this circumstance should be excluded from the scope of the
proposals”.

Data breaches happen all the time, so it’s important for your business to manage the risks related to a data breach and reduce the significant cost that is the result from it. The simple answer to this problem is to get insurance.

Your business and standard property insurance doesn’t cover certain important data, which includes all of your customer information and their contact details alongside employee security numbers. This information is perfect for a cyber-hacker, but Cyber Liability Insurance will cover these things for you.

Imagine not being able to take orders or collect any payments due to your system being down – Cyber Liability insurance covers this, too. This insurance will cover loss of profits due to a system fail that is caused by any virus or an attack.

Some people believe that cyber insurance is only suitable for large corporations, but it is also beneficial for small businesses.  Most hack attacks actually target businesses with less than 250 employees.

Here are a few reasons why you should consider investing:

• It probably covers more than you think
  Many policies offer “first party” coverage, meaning they will pay you for things like business interruption and the cost of notifying customers of a breach as a result of a cyber-attack. Without this insurance, you could be held liable and face severe penalties.

 

• You are protected if your cloud provider messes up
  If your website is hosted or stored in the cloud, you’re still legally responsible. You can’t fully control the way in which a cloud provider handles your data, but this insurance policy can protect you if your cloud provider makes any mistakes.

 

• Social media sites expose information with little control
  Your business site and your employees activity on social media can trigger liability if your business is responsible for the sites. Defamatory statements, leaked information and copyright infringement can all be covered with a Cyber Liability Insurance policy. Losing the trust of your customers can be much more damaging than the financial loss you will incur to repair the effects of the breach.

 

Cyber liability insurance has been available for around 10 years. However, it’s rarely purchased. The data and information of your business is probably worth much more to you than the equipment on which it is stored.

If you’d like some more information on a Cyber Liability Insurance policy we can provide for you, please contact us today for a chat.