Management Consultant Professional Indemnity

October 28, 2008 · Filed Under management consultant professional indemnity 

Organisations big and small, public and private, increasingly rely on the help of external professionals to improve their efficiency and skills. A management consultant can often be hired to provide training for key workers in a business, or simply to suggest improvements in working practice. Sometimes this training and advice is relied on to improve financial performance. If the opposite happens and a poor recommendation or piece of erroneous advice leads to a firm losing money, a company could be minded to try to recover their loss through a legal action. In some cases the cost of defending a case could pose serious problems for an independent consultant or specialist firm. However, management consultant professional indemnity insurance can protect a firm from such threats.

Management consultant professional indemnity will provide financial support should a consultant face a claim that they made a mistake or acted negligently, and that this led to financial injury for a client. Of course, it is by no means certain that a consultant will face being sued during their career, but it does happen. Legal bills can be heavy and can even be crippling in some cases. Professional indemnity insurance takes this concern away by picking up the bill, subject to certain limits.

Professional indemnity insurance also covers such legal threats as being sued for unintentional libel or slander. Other errors, like losing or damaging important documents belonging to a client, will usually also be covered. Even unintentionally breaching confidence or copyright will typically be covered by an indemnity policy, which may also include public liability insurance.

As with other types of insurance, professional indemnity cover will usually include excesses and limits. So, a policyholder may need to meet the first £500 worth of legal bills before a policy kicks in. They may also have cover up to, say, £100,000 worth of bills and no further, although cover can be provided to different limits for varying premiums.

Time is also a factor when it comes to legal cases. Many policies include retroactive cover, meaning they will even cover a legal claim which arrives after the policy started but which relates to an event which took place before that date. Consultants who retire or cease trading can also get what is known as ‘run off’ cover, which continues for a period after they stop working to provide protection for any claims which are slow in arriving.

Management consultant professional indemnity insurance is therefore an important safety net which can provide vital financial relief if a policyholder makes an honest mistake. All a policyholder need do is decided on the right level of cover which suits their needs. Once in place, the policy provides peace of mind and can even ensure a business keeps going as normal if it must face a legal challenge.

Comments

Leave a Reply