Management consultants’ professional indemnity insurance explained

The recommendations made by management consultants may often involve the future wellbeing and growth of their client’s company. Management consultants’ professional indemnity insurance aims to ensure that any damages sought by the client as redress, should those recommendations not work out, could be covered.

Wide cover

Professional Indemnity Insurance or PII typically provides financial protection for a wide variety of professions and professionals against the financial consequences of being sued by their clients.

It provides cover for a wide number of eventualities that may arise as a result of the services provided. These typically include:

  • accidental breach of confidentiality;
  • loss of documents or data;
  • defamation;
  • libel or slander;
  • dishonesty by the consultant or their employees;
  • unintentional infringement of intellectual property rights.

Any of these may cause financial or reputation loss to the business of the client, whose response could be litigation for restitution.

Without management consultants’ professional indemnity insurance cover, you may find yourself personally liable for any such awards together with legal costs and fees.

PII cover may typically provide this kind of protection;

  • for you if you work on your own;
  • for your business partnership;
  • for any employees that you may have – though this would not extend to employers’ liability cover which you may need in addition .

Valued option

For many professions involving the provision of consultancy services, PII may not actually be mandatory.

However, clients may request that consultants provide their own cover. Even if they don’t though, in a competitive selling marketplace, potential clients and buyers may value a proposition that includes a comment about the existence of PII.

They may regard it as a sign of your personal responsibility and experience.

As a consultant, you may always endeavour to provide clients with exemplary work, to meet your commitments and achieve a successful outcome on each assignment.

Unfortunately in a high stress occupation, mistakes can and do happen though.

Making sure that you have the resources to cope with the financial consequences of any such mistakes may be that bit easier if you have the protection of management consultants’ professional indemnity insurance behind you.

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