Lyons takes tough line on potential for breakaway brokers
Giles has moved to stop former members of staff attacking the business by reminding its current employees of the firm’s strict policy over breaches to restrictive covenants.
In a note sent to Giles employees by managing director Sarah Lyons last week, the broker explained to staff that anyone in breach of their covenant once they have left the business would be dealt with “very seriously”.
This comes amid a period of breakaway brokers within the industry, often led by former vendors or management teams.
As Insurance Times reports this week, restrictive covenants put in place at the height of the consolidation boom are now expiring and new brokers being launched.
A Giles spokesman said: “Giles has always had a robust and clear policy on restrictive covenants, and takes any breach very seriously. Where appropriate, we take action to protect our business and will continue to do so to safeguard the hard work of our team.”
Several former Giles staff are believed to be in the process of launching new businesses:
- The former directors of Ipswich-based Henley Risk Management, acquired by Giles in July 2008, are said to be setting up a business led by Robert Shurety. According to Companies House, a company in Ipswich was registered this month. Shurety declined to comment.
- In the North East, Phil Bailey, former operations and agency manager at Arnott Commercial, which was acquired by Giles in December 2008, has launched Square Circle Insurance.
- Kevin Elliott, formerly of broker Elliott Garden, which was bought by Giles in April 2008, is planning to start a broker in Durham next year once his covenant expires.
- Last month, Insurance Times revealed that former Giles trading and placement director director Andrew Watson had joined Scottish broker George Stubbs. Watson has launched a Glasgow office for the broker and has been joined by a handful of former Giles staff.
Giles’s last reported dispute that resulted in legal action took place a year ago, with former employee Adam Scott. In a writ, Giles claimed Scott breached his restrictive covenant by attempting to take business from the company following his departure. The case was eventually settled.