Thinking about professional Indemnity Insurance

June 30, 2010 · Filed Under Uncategorized · Comments Off 

If you do any type of freelance or consultancy work, either on your own or as a member of a small business team, then professional indemnity insurance (PII) may be something that could help provide you with financial protection against being found liable to pay damages to a client.

PII can typically provide cover for a wide number of professional occupations including:

  • IT contractors;
  • consulting engineers;
  • management consultants;
  • legal professionals;
  • forensic consultants;
  • photographers.

Professional indemnity insurance provides financial assistance in the event that a client or ex-client sues you to recover losses that they believe were caused, somehow, by you.

Typically this may be as a result of:

  • unintentional intellectual copyright infringement;
  • accidental breach of confidentiality;
  • defamation;
  • libel or slander;
  • loss of documents or data;
  • errors on your part;
  • etc.

If the end result is that your client’s business has suffered financially or from a loss of reputation attributable to you then you may sued.

PII can cover the cost of damages awarded against you as well as legal expenses and fees (limits may apply).

For some professions e.g. legal, PII may be mandatory. Some clients may insist that you have PII even though it may not be a legal requirement for the services you provide.

Premiums will vary, depending on the level of income you have and the amount of cover you opt for.

A sensible approach to PII may be to opt for the most comprehensive level of cover you can afford. If very basic, you may have to find the shortfall yourself should a case for damages be awarded against you.

Over time, perhaps as the nature of your work changes or your business expands, it may make sense to revisit your level of cover to ensure that it still matches your needs.

Another point to remember is that if you stop working and cancel your insurance, your cover may just stop. The nature of your work may be such that problems may take some time to appear so you could still be at risk from being sued.

You may see this referred to as run-off cover.

In a similar vein, work carried out prior to PII being taken out may also need to be catered for. This may be known as retroactive professional indemnity insurance cover.

Management consultants’ professional indemnity insurance explained

June 26, 2010 · Filed Under Management Consultant Professional Indemnity Insurance · Comments Off 

The recommendations made by management consultants may often involve the future wellbeing and growth of their client’s company. Management consultants’ professional indemnity insurance aims to ensure that any damages sought by the client as redress, should those recommendations not work out, could be covered.

Wide cover

Professional Indemnity Insurance or PII typically provides financial protection for a wide variety of professions and professionals against the financial consequences of being sued by their clients.

It provides cover for a wide number of eventualities that may arise as a result of the services provided. These typically include:

  • accidental breach of confidentiality;
  • loss of documents or data;
  • defamation;
  • libel or slander;
  • dishonesty by the consultant or their employees;
  • unintentional infringement of intellectual property rights.

Any of these may cause financial or reputation loss to the business of the client, whose response could be litigation for restitution.

Without management consultants’ professional indemnity insurance cover, you may find yourself personally liable for any such awards together with legal costs and fees.

PII cover may typically provide this kind of protection;

  • for you if you work on your own;
  • for your business partnership;
  • for any employees that you may have – though this would not extend to employers’ liability cover which you may need in addition .

Valued option

For many professions involving the provision of consultancy services, PII may not actually be mandatory.

However, clients may request that consultants provide their own cover. Even if they don’t though, in a competitive selling marketplace, potential clients and buyers may value a proposition that includes a comment about the existence of PII.

They may regard it as a sign of your personal responsibility and experience.

As a consultant, you may always endeavour to provide clients with exemplary work, to meet your commitments and achieve a successful outcome on each assignment.

Unfortunately in a high stress occupation, mistakes can and do happen though.

Making sure that you have the resources to cope with the financial consequences of any such mistakes may be that bit easier if you have the protection of management consultants’ professional indemnity insurance behind you.

The ins and outs of management consultants insurance

June 20, 2010 · Filed Under management consultants insurance · Comments Off 

As with any form of insurance, you may need management consultants insurance because it is an unfortunate fact of life that things can, and do, go wrong.

That’s life

Whether you work alone or with a consultancy partnership, you may never be 100% certain that the consultancy services you provide for your clients are always going to go exactly according to plan.

Something unexpected may crop up that can be attributable to you through something that you did or failed to do. There may be consequences that result in financial loss or damage to the client

It may be rare today to find a client who reacts to such financial loss with a fatalistic – ah well that’s life – shrug of the shoulders.

Court cases

These days, clients may well try to minimise any losses by suing the people or person they think is responsible.

If this turns out to be you or your company, then you may find yourself in court defending yourself against a claim for damages.

This could be as a result of:

  • negligence on your part, something you did wrong or didn’t do at all;
  • unintentional breech or copyright or misuse of confidential information;
  • libel or slander;
  • legal liability for the loss, erasure or destruction of documents or data;
  • a dishonest act by you or one of your employees.

Of course, if you have employees then you may also benefit from the additional cover provided by employers’ liability insurance in the event that your employees sue you on an employment related issue.

If a case is found against you, then the protection of management consultants insurance may cover damages awarded against you as well as legal fees and expenses.

Optional cover

For some professions, PII cover is a mandatory requirement.

While this may not be the case for management consultancy, whether you are a self- employed or operate as part of a small practice perhaps with your own employees, having the protection that professional liability insurance cover can provide may typically be a sensible idea.

Life can be stressful enough without having to worry about the financial consequences of being sued. Management consultants insurance may be able to offer you peace of mind, thereby allowing you to concentrate on what’s important.

Protecting your livelihood with IT consultants insurance

June 12, 2010 · Filed Under IT Consultants Insurance · Comments Off 

You may find yourself being sued. Without IT consultants insurance, you may end up needing to pay possibly crippling amounts of money to settle damages and legal fees.

How could that happen?

As an IT consultant, you may be responsible for giving advice and guidance on some significant spending decisions.

While the budget holders may all sign off on your recommendations, if there are problems later on, you may find that you’re held accountable.

Indemnity insurance

IT consultants insurance is a type of professional indemnity insurance (PII).

This provides financial assistance in the event that the client you are working for suffers damage or financial loss which can be attributed to something that you may have done, or omitted to do, in the course of providing them with your services.

As an IT consultant, negligence on your part may be more likely to cause financial rather than physical damage.

Some typical areas where PII for IT consultants may typically help provide you with protection include:

  • accidental breach of confidentiality;
  • loss of documents or data;
  • infringement of intellectual property rights;
  • defamation of character;
  • allegations of libel or slander.

PII will typically also cover your legal fees and expenses, whether or not the case against you is upheld.

Optional extra

Indemnity insurance for IT consultants is not compulsory in the way it typically is for some other professionals like solicitors or financial advisors.

However, aside from the very real protection that PII provides, it may also demonstrate your responsibility and professionalism to potential clients.

In an environment where competition for work is fierce, having a few extra points in your favour may do no harm.

Continuity of cover

An interesting facet that may be worth consideration is that with many providers of PII, if you stop paying premiums your cover will stop. Nothing unusual in that, you may think.

The trouble is, the nature of your job is such that it may be that problems do not arise straight away.

So if you finish one assignment, decide to take some time off and cancel your IT consultants insurance because you won’t actually be working, you may have to make special arrangements (sometimes known as run-off cover) to ensure that you would still be covered for historical problems.

Outlining IT contractors insurance

June 4, 2010 · Filed Under IT contractors insurance · Comments Off 

As an IT contractor, it may be advisable to consider the benefits of IT contractors insurance cover.

Why?

No matter how good you are at your job, if you think back over your career in IT, you may well be able to remember occasions when projects you were working on went wrong. Perhaps serious consequences arose for your employer.

If you were a permanent employee, you may have been protected from all of the financial consequences.

That may not be the case if you’re working as an external contractor.

Professional indemnity cover

IT contractors insurance is a form of professional indemnity insurance (PII).

It is not usually a mandatory requirement for IT contractors in the same way as it typically is for solicitors, architects, insurance brokers and the like.

It provides financial protection against claims by your client that your mistake, negligence or bad professional advice, have resulted in loss or damage to them or to their business.

They may know you didn’t mean any harm

In today’s harsh economic reality though, the chances that an unintentional error of judgment on your part will be overlooked with a shrug of the shoulders may be very slight indeed. Budgets are typically tight and there may be no slack available to rectify the position.

It may be all too tempting for a client to decide to sue you to try and get some redress for your actions.

Wide range of cover

PII can provide cover for a lot more than just faulty system design, missing deadlines or bad programming. It can also protect you financially if you are sued as a result of action such as:

  • you losing your clients data or documents;
  • defamation, libel or slander;
  • a dishonest act on you part;
  • you accidentally breaching clients confidentiality;
  • infringement of intellectual property rights.

You may find that your legal fees, which may need to be paid even if no case is found against you, will typically be included as standard in the PPI policies of many providers.

All other things being equal

Competition for IT contract positions can be fierce.

Even though it is optional for your line of work, having IT contractors insurance in place may highlight your professionalism and maturity to potential employers and could help swing a hiring decision your way and help you secure that precious contract.