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


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 ( "He

spent 3

1/2 years in court. The original attorney did not ask for an


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


September 13, at 5 p.m. at Stark & Stark, 993 Lenox Drive. It is free

by reservation; call Nadine Dunn at 609-219-7413.

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


Business valuations are most often needed when couples divorce, when

someone dies and heirs must pay gift tax, or when shareholders


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."

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Internet Insurance: AIP Meeting

Any business needs to insure against the usual kinds

of disasters, everything from fire to workers comp. But Internet


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


Tom Cox and Christi Newton of 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 (

AIP is six years old and bills itself as the largest and fastest


professional association in the industry. It offers input to the


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. considers itself "the first online real-time

business insurance provider" and represents such insurers as AIG,

Chubb, Hartford, Kemper and Travelers ( "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, 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


businesses with specialized needs, has an operations platform that

runs the entire agency, and can handle any size customer



When prospective clients can key in information at,

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


"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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