Internet Insurance: AIP Meeting
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Prepared for the September 13, 2000 edition of U.S. 1 Newspaper.
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Shareholder Disputes: Protecting Your Stake
A physician in the Central Jersey area took a partner
into his practice and gave the new partner a 20 percent share. Then
he took in two more partners, giving each a 20 percent share. The
worst happened: the three new partners — who now controlled 60
percent — fired the founder. A lawsuit ensued, and the three
dipped
into corporate funds of the practice to defend themselves, leaving
the founder to use his personal monies for the litigation.
“His buy/sell agreement applied only in case of death,” says
Phil Kleckner of Amper Politziner & Mattia (www.amper.com). “He
spent 3
1/2 years in court. The original attorney did not ask for an
injunction
to prevent them from spending corporate funds.”
Along with Donald B. Brenner of the Stark & Stark commercial
litigation group, Kleckner will discuss “Shareholder Disputes:
Protecting Your Investment from Potential Armageddon,” on
Wednesday,
September 13, at 5 p.m. at Stark & Stark, 993 Lenox Drive. It is free
by reservation; call Nadine Dunn at 609-219-7413. www.stark-stark.com
Kleckner went to the University of Dayton, Class of 1967, and was
head of the international anti-fraud division of one of the largest
worldwide banks before joining Amper Politziner four years ago. He
is a CPA, a certified fraud examiner, and is accredited to do business
valuations. His firm is recognized as having the largest valuation
practice in the state.
In assessing the value of a business, accountants have a difficult
time when the industry has few “comps,” comparable businesses
that have recently been sold, says Kleckner. Without comps, valuators
must “downsize” something in a similar field and then account
for such factors as cash flow, earnings, basis of growth, industry
trends, success in management, and whether the key person can be
replaced.
Business valuations are most often needed when couples divorce, when
someone dies and heirs must pay gift tax, or when shareholders
disagree.
Deal with potential disagreement in advance, Kleckner says, by working
out an agreement about who makes what decisions, who will control
the company, what percentage of the vote is needed to take action,
and how a shareholder can get money out of the company.
Says Kleckner: “People doing the sweat and blood work want to
get something out of the company. Get this recognized in the agreement
beforehand. If you are the creative talent, have performance bonuses
set out in the contract. Otherwise, the person providing the money
will get the profits.”
Top Of PageInternet Insurance: AIP Meeting
Any business needs to insure against the usual kinds
of disasters, everything from fire to workers comp. But Internet
entrepreneurs
have other concerns. They might want to insure against such disasters
as technology errors and omissions, website business interruptions,
advertising injuries, sabotage by hackers, and patent and trademark
infringements.
Tom Cox and Christi Newton of CoverageCorp.com will speak
on “Commercial Insurance Solutions for Internet Business”
at the Princeton Chapter of the Association of Internet Professionals
(AIP-Princeton) on Wednesday, September 13, at 6 p.m. at the Sarnoff
Corporation. Light refreshments will be served. Cost: $5 at the door.
Call 908-281-3495 (www.princeton.us.association.org).
AIP is six years old and bills itself as the largest and fastest
growing
professional association in the industry. It offers input to the
public,
the press, and the online community on issues shaping the future of
the Internet. Chris Feathers, a representative from the national
organization, will give a report at this meeting.
CoverageCorp.com considers itself “the first online real-time
business insurance provider” and represents such insurers as AIG,
Chubb, Hartford, Kemper and Travelers (www.coveragecorp.com). “We
are an insurance agency, and we partner with associations, financial
institutions, payroll companies, and B to B businesses,” says
Newton in a telephone interview from her Virginia office.
In contrast to Princeton-based InsureHiTech, CoverageCorp.com hopes
to sell general, standard policies to small to medium businesses of
100 employees or less. It will also open up its site for other brokers
to use as a co-branded platform. InsureHiTech concentrates on
technology
businesses with specialized needs, has an operations platform that
runs the entire agency, and can handle any size customer
(www.princetoninfo.com/200008/00816s02.html
and www.insurehightech.com).
When prospective clients can key in information at CoverageCorp.com,
that information is sent to various insurance carriers, and a quote
is returned in real time. When accepted, the quote translates to a
binder, and instructions are sent to the carrier so a policy can be
mailed.
“We will provide not only one quote but three to five quotes per
request. We are developing software for ourselves and will lease the
software to other agents to make their internal quote process more
efficient,” says Newton. If clients have questions, they can join
a live chat online or call the customer service center. Other online
capabilities include issuing certificates of insurance, making midterm
changes, and reporting claims.
— Barbara Fox
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