You may have already done your homework when setting up your business and know all about choosing management consultants professional indemnity insurance. However, if you are not sure what this is and what the benefits may be, then read on.
What protection does a policy offer?
In short, management consultants professional indemnity insurance provides protection to management consultant businesses in the event that they are sued and taken to court.
While we all do our very best to be professional, there may be times when a mistake occurs and these mistakes may be very costly.
Excellent book keeping may pay off
Whether you are running a small or large business, it pays to learn the skills of book keeping and documentation. Always ensure that any contracts have been well planned and you have made sure the client knows what your responsibilities are. You may wish to give careful attention to how you lay documents out and make a note of everything that you do for your clients. This might typically include detailing times and dates and exactly what you did. In the event of someone claiming against you this documentation may then be used to show exactly what happened and whether you did something that negatively affected your client.
Do providers all offer the same?
When you go looking for management consultants professional indemnity insurance, you may wish to bear in mind that not all insurance providers typically offer the same elements of cover.
For example, some insurance providers might offer higher maximum amounts if you were to claim, while some providers may give you what you perceive to be more for your money than others.
Typically a policy may protect you against the following, depending of course on the provider and the level of insurance you choose;
- slander and libel cases;
- public liability insurance may be included or you might need to pay more to have it added on;
- defamation of character;
- losing documents or data belonging to a client;
- accidental breach of confidentiality;
- infringement of intellectual property rights deemed unintentional.
When choosing management consultants professional indemnity insurance, you might be saving yourself from a lot of stress and financial worry if the worst were to happen and a claim were made against your company.
If you own your own management consultants business, protecting your livelihood may be at the top of your list. Sadly, in today’s particularly litigious society, any professional is may run the risk of being sued. However, there is insurance that can help provide protection against this event – management consultants insurance.
If you have never considered insurance or have just started out in business it may make a great deal of sense to look into taking out management consultants insurance. In fact it may even be compulsory within some professions.
What are the risks of not having insurance?
If you have no indemnity insurance to rely on, your company may be exposed to claims made against it. If a customer decided to take you to court, you typically have to find the court costs and fees out of your own pocket. These may add up to several thousands of pounds when you add in compensation. With a professional indemnity insurance (PII) policy in place, this generally helps towards easing the costs.
What protection might a policy provide?
Management consultants insurance may typically provide protection against the following:
Professional neglect – If you are seen to have neglected your duties in business you may be looking at court action against you;
Breach of confidentiality – If you have signed a non-disclosure form when working with a company or individual, and you breach their confidence you may become a prime target for a court case. Even if you have not signed anything, you still have be very careful when discussing business with others;
Product liability – If you rent out or sell products as part of your business you are at risk if those products injure or even cause death, this part of an insurance policy provides protection for that specific reason;
Libel and slander – You may say something about a company or individual or quote someone and get it wrong without realizing it. In this case you might be taken to court for slandering them and this is where libel and slander insurance protects you.
Checking the benefits and small print
Before you rush into taking out management consultants insurance take time out to check the benefits of any policy and find out what limitations or exclusions may apply. For example, some providers might include public liability insurance as standard or you may need to add this on to the PII cover.
Anyone in business might want to consider the various types of insurance out there. For example buildings insurance typically protects against something happening to your business premises. Another type of insurance that you may wish to consider if you are in the information technology business is IT consultants insurance.
A policy typically provides protection against several events.
What is IT consultants insurance?
As an IT consultant you are typically dealing with individuals and companies who rely on you and your advice. If you were to give someone advice that causes negative implications to a business, you may potentially find yourself facing a claim for compensation and a court case. This typically comes with often substantial costs, but with professional indemnity insurance, you may get assistance – up to a set limit – to help meet your legal costs.
Losing clients data or documentation
As an IT consultant you are probably around a great deal of data belonging to various clients. If something happened to this data or paperwork, you may be taken to court. Again IT Consultants insurance is there to help you out financially.
Breach of confidentiality
You may accidentally cause a breach of confidentiality. The insurance policy may typically cover this event, which again might end up saving you a great deal of money as well as damage to your reputation.
Public liability insurance
If you have visitors at your place of business you may want to consider if public liability insurance is already included in your insurance. This form of protection typically helps to protect you against the financial implications of being sued if someone suffers injury or death whilst on your property. Some insurance providers may include it as a standard part of your cover, or it can often be an optional extra.
Choosing your policy
Of course insurance companies recognise that there are many different sizes of businesses – your company may consist of just two or three or it might be a hundred or more. With this in mind you may wish to check out that any IT consultants insurance policy you are considering is adequate for your company’s needs. Reading the terms and conditions thoroughly and speaking to your broker if you have any queries may be key to ensuring that you get the most suitable insurance for your business.
Anyone offering a professional service by way of a business may benefit from certain types of insurance. IT contractors insurance is a type of insurance that typically provides protection offering several benefits and may be worthwhile considering if you are in the information technology business.
The benefits included in IT contractors insurance may vary depending on who you take the policy out with and the level of insurance you require. While this type of insurance is not typically compulsory, it may pay to have it behind you if the worst case scenario were to occur and you found yourself in a tight spot if a claim is made against you by a client for such things as loss or damage (see examples below). Without insurance you may have to find large sums of money out of your own pocket as owner of the company.
You may find that the policy typically protects against events such as these listed below. However, not all IT contractor insurance policies will offer all of these benefits and features. Some may come as standard or may be an optional add on or may not be available at all, so it may make sense to consult a specialist professional indemnity insurance broker:
- a loss of customer’s data or documents – as you are offering a service as an IT contractor insurance covering this loss may be a lifeline as typically you may be involved with data and/or documents;
- public liability protection – the insurance provider may include this in your policy or you may be required to add this on as extra. This part of the insurance generally provides protection in the event of a member of the public suffering an accident or loss on your property;
- breach of confidentiality that is accidental;
- slander and libel claims that may be made against you.
When taking out insurance always check the small print as there are typically terms and conditions and again these may differ based on your insurance provider.
In summary, while insurance may be perceived as another added cost, without it your company and business may be put at risk. If the worst scenario raised its ugly head you might be forced out of business if a claim for substantial damages is made against you and have no insurance behind you.
Imagine this, your business has at last taken off and you are enjoying some success after many years’ of hard work. Now imagine that one day you make a slight mistake and a client sues you for the negative impact it has had upon his or her business. Without any type of professional indemnity insurance where might you get a large sum of money to pay for your legal and other costs? A small mistake on your part may end up draining your business of funds.
In some lines of work professional indemnity insurance may actually be compulsory. This might typically be the case for anyone working as an advisor, consultant or as an accountant in particular professions.
Many other types of business may benefit from taking out this form of insurance, even if it is not compulsory.
For example, some local councils may only work with companies who can show proof of insurance.
Events that may be typically covered in a policy
While every insurance provider differs in what they offer in their insurance policy you may find that a policy covers all or some of the following: slander and libel claims, professional neglect, copyright breach, confidentiality breach, making a statement that may be considered to be negligent or performing an action that is considered negligent on your part.
Go over the fine print
Just as it is important for you to ensure that any contracts you hand out to clients or literature detailing the work you intend to do are set out properly, the same goes for your insurance policy. Insurance policies may differ slightly in the cost of the premiums between providers, and they may also differ when it comes to the fine print. There are nearly always limitations on the amount you may be able to claim if needed, and exclusions typically apply. Finding out what you are allowed to claim for and what not before you pay for the insurance might save you problems in the event that you ever do need to claim.
Peace of mind
In short, professional indemnity insurance is there to provide peace of mind – if a mistake is made by you in your business that is covered by your PII insurance, typically you are not left to pick up the costs alone.