Basic guide to management consultant professional indemnity insurance
Sorting out the right kind of cover is essential for any business, whether you are a pizza delivery driver or a management consultant. Different kinds of policy are appropriate to different kinds of business, and indemnity insurance is an option for anyone worried about the legal risks of what they do. Specifically it applies to the chances of you being sued, or rather the financial implications if you ever face legal action. For anyone unsure about what it does, here is an outline of what management consultant professional indemnity insurance is.
Indemnity cover is not exclusive to management consultants and can apply to anyone who offers professional advice for a living. It covers you if you are formally accused of making a mistake in the course of your business, i.e. being sued.
Besides mistakes, which may result in legal action if they cost a client money, policies normally also cover omissions, acts of negligence, and other allegations. These are normally claims you have breached confidentiality or copyright, defamation and slander, and the loss or damage of a client’s data or documents.
Should you be formally accused of any of this, you simply claim on your policy, which will pay out towards your legal defence. Hiring legal help is hardly ever a cheap experience but is essential in many cases if you wish to defend an action effectively.
Management consultant professional indemnity insurance also typically pays out for the cost of any compensation which might be awarded against you in the event the claimant is successful. As you might have guessed, indemnity cover will not pay out for an indefinite amount and there will be a ceiling attached to a policy. Thankfully this can normally be specified by the policyholder, and the larger and more high profile a firm is, the larger they may want this ceiling to be. Of course a premium may be priced accordingly.
Management consultant professional indemnity insurance will also pay out no matter how valid the claim against you is an no matter how far through the courts system the case goes. Protection will be provided all the way up to the High Court if necessary, provided you are still within your cover limit. It’s therefore a useful and potentially vital safety net against the financial impact of a frustrating and costly legal claim.
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