Legal bills covered with management consultant professional indemnity
Anyone who has gathered detailed and expert knowledge can set up as a management consultant, offering their valuable experience to clients who need the advice of an outside source. Some may need you to retrain a section of the workforce, others may need you to even run a department for a period of time, while some will be looking for advice towards developing new business strategies. All of these things are challenging and rewarding, but all of them can carry hidden legal problems. Should you make a mistake, or even be accused of it, you could face legal action. While this is part of the job of being a freelance and part of being a management consultant, it is also unpleasant and potentially a financial disaster. Management consultant professional indemnity policies provide you with an invaluable shield against legal action by paying for your legal defence.
Many people decide that this kind of cover is useful simply just as a safety net. It will kick in if you are formally accused of making an error, omission, or acting negligently the normal course of your work. Should this have caused a client to lose money, they may feel they have suffered what is called a financial injury. This means they will take legal advice about getting compensation in some cases.
Of course you will need a legal defence, and to do this effectively it can help to not have to constantly worry about the legal bills associated with it. Management consultant professional indemnity picks up the tab, even covering the cost of compensation should it be awarded against you.
Of course there are some conditions, and these normally include that what you did was not deliberate or malicious. For example, a policy will normally protect you against claims that you have defamed somebody, with a condition that you did not defame someone knowingly. Other eventualities typically covered include the loss or damage to a client’s data or documents, although again obviously this will obviously need to not have been deliberate.
An indemnity policy like this normally also protects against the claim that you have breached someone’s confidence or copyright, and if you have employees as part of an agency, for example, any claim that they have acted dishonestly will also normally be covered.
Management consultant professional indemnity typically comes with a ceiling on the policy, beyond which the insurance company will not pay out. However, limits can normally be quite high, and you will need to make a decision about what amount would be suitable for your business. Companies dealing with higher level clients with a turnover in the millions, may need protection for millions of pounds, for example, while a lone freelance with a limited client list may not need this.
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