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by Allan Bell

Imagine the scene...

One of the part time Direct Sellers in your company is demonstrating your products in her friend’s home to a group of customers. An opened bottle of red wine sits, almost full, on the mantelpiece alongside the glass of water used by your Direct Seller. As she reaches, slightly distracted by a customer’s question, for the glass, she accidently knocks over the wine bottle.

Wine everywhere! Especially on the expensive, light coloured carpet and, worse, into the back of the 47 inch Plasma TV.

She’s caused a serious amount of damage. Who’s going to pay?

Without insurance, my guess is everybody. The customers are upset – they won’t have any parties. The host is angry – her contents insurance may cover it, but there’s a claim form to fill in, a no-claims bonus to lose, delays and no TV for her husband to watch the sports channel. The Direct Seller, trying to make it right, offers presents, gets no sales and makes no money. She may leave the business. All uplines lose and your company loses. You lose! You may even have to pick up the bill to avoid adverse publicity and loss of goodwill. You lose twice!

However, what to do? You can’t add the direct seller cover to your company policy, because they are running their own businesses. You can’t even insist that they carry public liability insurance, because that could be seen as too directive and may lead to the self-employment status being jeopardised.

Accidents happen – they always have and they always will.

Fortunately, help is at hand. There are at least two custom built solutions, designed specifically for Direct Sellers, and CEO’s can fulfil their obligations by simply making sure that any new entrant to the business knows where to go to source the service. This can be by reference to the DSA website, where the service providers are Supplier Members, or by naming one or more of the choices.

One such company is Primo plc, who will customise a plan for the requirements of an individual company’s Direct Sellers. Their Managing Director, Robin Foster Taylor, told me that, whilst holding public liability insurance is not a legal requirement for businesses, it is part of the DSA Code of Conduct in the UK, which strongly advises DSO’s to recommend that their Direct Sellers are properly covered. Even so, there seems to be a widespread non-compliance amongst Direct Sellers.

It seems to me that, whilst we as an industry applaud ourselves about the fantastic life changing earning opportunities our companies offer, we do little to educate new entrants on basic business skills and requirements. We may well teach people how to do parties and provide all sorts of information on the features and benefits of our products and services, but can we honestly say that we provide enough support to a brand new small business owner/operator? I don’t think so.

Ask yourself this question. Is the short-term benefit of playing down the administrative necessities associated with running a small business worth the trade off? And if you think the answer to this is ‘yes’, at what level in the hierarchy is it not worth the trade off? After all, YOU have to worry about insurance, legal affairs, tax and accounting etc etc. It’s written in statute that business managers have a legal obligation to carry the appropriate cover. You’d probably be rightly concerned if your Direct Sellers were driving with no insurance – especially on your account.

If it was difficult to rectify, it would be more understandable, but, in my opinion, it makes no sense to ignore this. For the cost of about half of one night’s earnings, your salespeople can buy their own cover for a year.

It’s up to the company to ensure that the new Direct Sellers know what to do and where to go for affordable cover. So make sure that the right arrangements are in place and the training or induction covers it.

And then there will be no more crying over spilt milk (or red wine!).