Important elements of management consultant insurance
What protection a company needs and just how much of it is required is an important business decision. For example, if your firm needs public liability cover, just how far should it stretch, and if your business involves a lot of expensive equipment when and where should it be covered? Legal implications can also be important for certain companies, particularly consultants who work on a contractual basis with a series of clients. Among some of the more high profile consultants are management professionals hired by companies to sort out problems or turn departments around.
Management consultant insurance can provide a safety net not just against public liability issues but also other legal matters.
Provided it has a professional indemnity element, a management consultant insurance policy can help guard against some of the more unpredictable legal cases. As a hired professional a management consultant may be held liable if their advice is useless to a company or worse still, actually financially harms it. For example, a management consultant may be hired to deliver a detailed training programme to a number of important staff members for a firm. If some of the advice proves to not actually harm the business, the firm could feel they have lost money and seek compensation through a legal case. Indemnity insurance as part of a management consultant policy would pay for your legal bills related to the defence.
Therefore it can be important to check what is included with a management consultant insurance policy. Products which simply cover public liability would not payout in such circumstances. Indemnity cover applies not just to the fees associated with your legal defence but also any compensation which happens to have been awarded to a successful complainant.
Indemnity cover typically protects against mistakes, omissions, allegations of acts of negligence and unintentional defamation. It also covers legal pitfalls like allegations of breach of copyright or confidence, claims that a consultancy’s employees have acted dishonestly and also may pay out if you are accused of losing or damaging a client’s important data or documents.
Indemnity protection will not payout for an unlimited amount of legal expense, and a policy limit needs to be agreed when you take out the cover. You can often choose a level appropriate to your firm, so a smaller business might want protection for just a few thousand pounds worth of protection, while a much bigger company with a higher turnover might need something stretching to millions.
Management consultant insurance can also be tailored to to provide additional indemnity protection in between policies or changes to the business. For example, retroactive cover provides protection for any legal claims which arrive in future but which date right the way back to before you even took out the insurance. Overrun or run off cover also provides protection for when you are changing jobs, insurers, or simply winding down the consultancy business.
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