Insurers want to exclude e-business transactions from surveyors’ insurance. But firms are taking all the necessary precautions with their electronic output, aren’t they?

Pretty much any firm of substance has a web site these days and most people are as happy to send e-mails as they are letters or faxes. Just when I was beginning to think that we were all properly getting to grips with electronic communication, the old world is about to come back and bite us.

The problem is this: professional indemnity insurers are seriously looking to endorse surveyors’ policies with an exclusion clause to take away cover for business transacted electronically. This means business carried out over the Internet, on extranets and web sites, by electronic mail or by electronically transmitted documents. About the only thing left must be semaphore – and even that might be in jeopardy if you have a battery-powered flag!

It’s easy to knock the idea as the insurers being behind the times but it is clear that they are worried. I have done a bit of web-surfing to see if their fears are justified. Here are a few of the things I discovered:

  •  A small estate agency has set up a site. Really, it is just pictures of houses with brief details and prices. But for some reason, caution has been thrown to the wind and none of the usual disclaimers from the paper version appears on the web site. Where, for instance, are the usual words “subject to contract”?

    What if a foreign purchaser from some unknown state takes a look. He e-mails the agent, saying he will buy a particular property

    • Insurers want to take away PII cover on e-business
    • This includes Internet, e-mail and extranets
    •  Their fears may be justified: many firms’ sites do not carry disclaimers

    for the asking price. Is there a contract in place and what law applies? The agent will say there is no deal. The investor says the law of his own country applies and there is a contract in place. Confusion reigns.

You may think that this is an extreme scenario but take a look at a few agents’ sites and see how many you can find with even the most rudimentary conditions or disclaimers attached. You will find that it is almost none.

If you have a web site with no statement about the applicable law on it, change it now, and refer to English law. Insurers are paranoid about jurisdiction because of the damages laws in the USA, where the sums paid can be astronomical. Incidentally, you may find that if your contract is found to be under the jurisdiction of US law, the terms of your policy will probably mean that there is only restricted cover anyway.

  • A large and reputable QS firm (not Cyril Sweett, I hasten to add) has set up a web site that looks as if it started, as many do, as an electronic version of its brochure. It has subsequently decided to enhance the site by adding usable construction cost information for fit-out projects.