Moreland partners with Hiscox to provide custom-built professional indemnity insurance

Moreland Insurance, one of Scotland's biggest and most successful brokers, has teamed up with specialist insurer Hiscox to introduce a new and exclusive professional indemnity insurance policy aimed specifically at franchisors.

The tailor made product is backed by Hiscox, which was named Best Small Business Insurer by Start Your Business magazine in 2009, 2010 and 2011 and will be marketed by Moreland, which has a strategic partnership with the British Franchise Association, one of Britain's most powerful business organisations.

The new policy is designed to provide a comprehensive safety net for franchisors following a small number of high profile cases in which the business originators have found themselves threatened with litigation by franchisees.

Maurice Logie, director of Moreland, said: "This new product is a significant step in creating a defence mechanism for franchisors, who often have to oversee and regulate the activities of up to 30 or 40 franchisees.

"Franchisees effectively buy a template of a business model which is underpinned by the franchise agreement and if a dispute arises with the franchisor about the agreement, the policy will cover the franchisor's legal expenses."

The new product, which has been designed by the Hamilton-based company in conjunction with Hiscox, will help consolidate business stability and confidence in a franchising sector which is now estimated to be worth £12.4 billion to the UK economy.

Franchisors play a vital role, with nearly 900 franchise systems supporting 36,900 franchisee outlets which, in turn, employ an estimated 521,000 people. Encouragingly, the latest Natwest/bfa survey indicated that 90% of franchise outlets are profitable.

Moreland, a member of the Willis Commercial Network - one of the world's largest and most progressive insurance intermediaries - will offer the product to the whole franchisor community, which operates across more than 20 UK business sectors.

Mr Logie, who is also Lanarkshire Chamber of Commerce president, said that the policy was aimed at franchisors in recognition of their integral oversight role in the franchising structure, as the person with ultimate responsibility.

He said: "The bfa promotes ethical franchising so, by definition, a bfa member will demonstrate good risk management. Hiscox has recognised this and has tailored its product accordingly.”

Lee Turner, National Schemes Manager at Hiscox said: "The franchise sector in the UK is an important and healthy component of the UK economy, contributing significantly to both wealth and job creation.

"Franchisors are valuable entrepreneurs who are cascading their innovative skills and business expertise into the sector and this policy is designed to afford them the reassurance and confidence to continue to do so.”

Maurice Logie added: “Franchising has always been of great interest to me. We have supported the industry for many years and as a bfa partner it is very gratifying to be able to provide practical, comprehensive products to the main players within the sector."