When arranging insurance, the needs of the client should reign supreme – a pretty obvious sentiment I'm sure you'll agree, and a view that you'd think would be universally shared.
Lately though, I've been concerned by the increased number of commercial arrangements forced upon conveyancers who have work referred to them. One such example I've heard of, is a well-known estate agency chain which insists that cases referred to firms on its conveyancing panel are done so on the understanding that if legal indemnity cover is required, it must be arranged only via a specific insurer. This happens because the insurer is happy to pay a commission to the estate agent.
The question that needs to be asked is: are such arrangements detrimental to the interests of the client? After all, if the conveyancer is forced to use an insurer because the referrer receives a financial incentive, can the client be sure the policy, including its cover and terms, is the best option? In fairness, conveyancers cannot be blamed for the situation. Many have little alternative other than to accept this volume business, particularly during more challenging economic times.
The idea of receiving business from our customers purely out of a sense of obligation is not one that sits well with me. I'd rather our customers were using us as their preferred option based on the high service standards we provide, the level of cover we offer their clients, and the financial standing of our insurers, Liberty.
This type of arrangement could be detrimental to the interests of the client, and may also fly in the face of the Financial Services Authority's ‘treating customers fairly' regulations. In my opinion, insurers should all ‘win business fairly' and not put their own interests first by allowing commission arrangements to be hijacked in this way.