Management Consultant Insurance

October 30, 2008 · Filed Under Management Consultant Insurance 

Setting up a business often involves considering what sort of insurance might be needed along with the usual equipment, premises and training considerations. A management consultant, as a professional providing advice to businesses, is no different. Typically seen as an expert in their field, a management consultant is often relied on by businesses and organisations to provide guidance on efficiency and even to improve financial performance. Although it is easy to assume mistakes won’t happen, one error or wrong piece of advice could cause financial injury to a client, who could then sue for damages. A management consultant insurance  policy with professional indemnity cover is designed to guard against this.

Professional indemnity cover is designed to kick in if an individual consultant or specialist firm faces legal action because of a mistake or error which was caused during the conduct of the business. In a nutshell, it will pay the legal bills of defending such an action. Lawyer’s fees can run into thousands or pounds or more, even when a case is defended successfully, and an individual or business can end up in serious difficulty without the right protection. Many policies will provide cover right from an initial hearing all the way to the high court if necessary, subject to certain agreed limits.

Management consultant insurance
which includes professional indemnity insurance will also provide protection in the face of a range of other legal claims. A consultant could find themselves on the wrong end of a libel or slander action or could be accused of breaching copyright or confidence. These circumstances will typically be covered by a policy.

A management consultant will often find they are given important business documents or data belonging to a client during the course of their work. Should these be lost or destroyed by accident, a policy will also step in to help out with any legal claim that follows. Another potentially useful form of cover, public liability insurance, will also be included with many professional indemnity insurance policies.

Some consultants change insurance provider or do not arrange for management consultant insurance with indemnity cover until after they have been trading for a while. In such circumstances what is known as retroactive cover can be arranged, which will provide protection in the event that a claim arrives which relates to an incident which took place before the cover was purchased. Consultants can even arrange for a run off period, which covers them for a while after they retire or cease trading.

Although excesses and limits apply, as with any insurance, management insurance with professional indemnity cover will typically provide a safeguard against the threat of legal action, which is a significant risk in a legally-aware society. Legal bills can cause financial difficulty, stress and can distract from the running of a business. Professional indemnity cover aims to remove these concerns, allowing a management consultant to go on providing a service to clients even in the face of a court case.

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