Indemnity protection through a management consultants insurance deal

August 15, 2009 · Filed Under Management Consultant Insurance 

Few of us go through personal and professional life without making a mistake – slip ups are a fact of life, even with the best training and preparation there is. Errors while working as a consultant can be costly because of the work a management professional takes on – perhaps becoming an interim boss for a section of a company or being hired to make important recommendations of efficiency. As such management consultants insurance is often taken out as a crucial safety net by firms and individual freelances alike.

Professional cover normally relates to protection against legal threats, and this normally refers to things like public liability insurance and professional indemnity cover. Public liability is perhaps better understood than indemnity protection – being a legal requirement for many firms that operate in public or have members of the public on their premises on a regular basis.

Professional indemnity, on the other hand, will usually cover the cost of legal defence in the event you face being sued by a client – typically due to a costly mistake, error, or omission – circumstances not protected by public liability cover.

To give an example, a management consultant might be hired by a firm with a high number of sales staff to give advice about how they can improve their sales figures through various customer relations techniques – if numbers actually worsened after the assignment the firm may blame the consultant and take legal action.

Management consultants insurance typically covers the policyholder whether they are to blame or not – a payout is not normally conditional on the claim being valid. Furthermore, even if the policyholder loses the case, the insurance may even cover the cost of any compensation awarded against them, up to the policy limit.

The top limit on a plan is decided when the insurance is taken out and is important because it represents the maximum amount an insurance company will pay out towards legal defence and compensation – larger firms may need protection for millions of pounds, while smaller companies dealing with smaller clients may need a limit far smaller.

Management consultants insurance normally covers claims of errors, omissions, acts of negligence and also things like claims of unintentional breach of confidence or copyright, allegations of defamation and even the claim a consultant has acted dishonestly – this means some of the more common legal risks are less of a threat to a business with a straightforward insurance policy.

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