Agencies, General - August 24, 2020
When Two Become One
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RiskBox’s very own Gemma gives an overview on “Why agencies should always talk to their broker, whenever their business is going to change”


No, we are not talking about the 90’s song by the Spice Girls, but what are the implications when agency businesses change, and in this specific case, when two small creative businesses decide to merge. 

Please note that in this example we are looking at a very specific pair of small creative businesses, around the freelancer/micro agency size. Anything larger would need a more comprehensive approach, which we can help with of course. For the purposes of my blog today I’m just pulling out a couple of useful thought points

A couple of months back one of our agency clients came to us asking for some help. They had been operating for about three years, and done ok, but felt like they had achieved all they could with the business in its present state, so wanted to explore another direction

As luck would have it, one of their other agency owner friends was in an almost identical situation, having hit that invisible wall. 

They decided to combine forces and create a new agency together, however they still had some contracts for existing clients with their old businesses. They were unsure how best to make sure their Professional Indemnity cover protected them for their new business, as well as the two businesses being slowly wound down

Should they get three policies? Surely that wouldn’t be cost effective.

Should they just insure the new agency? Surely that would leave them exposed, and possibly in breach of contract

What to do?

Well, the second bit of luck was that they were both also RiskBox clients, so were comfortable speaking with us as to how to solve this problem

The solution was simple and cost effective. 

We were able to set up a new policy the new agency, to which we added both of the previous entities. The services provided by the new agency was similar to before, so insurers were comfortable the risk remained acceptable 

The limit was on an Any One Claim basis, so there was no fear of the insurance being exhausted by one entity to the detriment of another, and we were careful to ensure the retro dates were correct (so that they matched when the previous entities took their initial insurance covers out)

Overall we were all really pleased with the result, as RiskBox were able to give the agency certainty and save them money without needing rafts of information or multiple phone calls

The key take-away here is that insurance can be flexible to a the changing needs of an agency, so it is worth keeping leaning on your insurance broker throughout your journey, as it’s not just about renewals and claims

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