Many business owners do not put in place the correct contracts when hiring sub-contractors. Find out how the reputation and financial position of one business was saved by taking this important step.

Business background

Lyfesure is a protection brokerage, providing life insurance and critical illness cover to consumer clients all over the UK. Jon Baptie-Wood is the business owner and he set up in January 2019. Maintaining the business successfully throughout several lockdowns, he was keen to grow.

Initially planning to employ staff, he was approached by two experienced self-employed protection consultants who had been made redundant and were looking for a new company to work for. After carrying out his due diligence, Jon agreed they could join Lyfesure and remain self-employed, writing business under his Financial Conduct Authority licence.

Preparing the contracts

After meeting at a networking event, he asked Ella Stockdale of Humanity HR to prepare suitable contracts for the two new team members. He said: “Ella is always warm and friendly and she is clearly very knowledgeable in this area. She gathered all the relevant information and helped me put contracts in place that were bomb proof. It was a very thorough process.”

Uncovering a problem

For the first year the team members were successful, and Jon decided to employ a third person using the same contractual arrangement. However, standard internal compliance checks revealed that one of his original team members had started making errors. His prompt investigation soon revealed a number of cases of financial fraud.

Jon had to report his findings to the regulator. He explains: “The first thing they wanted to see was my contract with the team members. When I sent the contract that Humanity HR had prepared, it was immediately clear that I was not liable for the fraud. So the contract ensured my business reputation remained intact with the regulator.”

“The level of moral support has been exceptional. Ella has taken the weight off my shoulders, she’s been fighting my corner.”

Jon was able to terminate his contract with the team member as soon as the findings of the investigation were revealed. “It was a hugely stressful time, investigating the full extent of the issue, working with the regulator and insurers, and explaining to clients what had happened. Not only did Ella provide guidance and moral support through that time, the contract wording revealed that any losses incurred through the actions of my self-employed team members would need to be repaid. Without that the business could have been in a lot of trouble. She supported me in recovering that money, setting up the repayment agreements and liaising with him so I didn’t have to. The contract and the whole service was impeccable.”

Looking to the future

As Jon moves on from this challenge, he is planning to grow a team in Lincoln, offering a face to face service to clients. He is intending to hire employees, and is working with Humanity HR to ensure he has appropriate employment contracts.

Of the whole experience, Jon says: “The level of moral support has been exceptional. Ella has taken the weight off my shoulders, she’s been fighting my corner.  I didn’t know anything about contracts, I would have had to spend hours learning about it, so to have access to that knowledge and experience has been great.”

To ensure you have the right contracts in place to protect your business, book your free 30 minutes consultation and speak to Ella