Management consultants insurance – keeping clients happy

May 20, 2010 · Filed Under Management Consultant Insurance 

If you are a management consultant then somewhere near the very top of your critical success factors will be the need to inspire client confidence. How could management consultants insurance help you achieve that?

Client confidence – an intangible thing

It’s not easy to precisely define client confidence. If you have a contract with a client and some successful history of working together then hopefully that’s an indication that the client has confidence in you.

Yet at the outset during tenders and proposals, particularly if you have no previous record of working together, the client may be looking at a whole range of indicators trying to assess whether you’re someone that they wish to do business with.

Yes, your price and skills will be important factors but your client typically will also be looking for indications of your professionalism and maturity as a provider of service.

Management consultants insurance is one indication that you have thought seriously about the nature of the business you’re engaged in.

Client perceptions of risk

Clients today are typically looking for partnership and shared risk activities.

The days when you as a service provider could get it badly wrong and walk away carefree are now almost gone.

Clients know only too well how much it’ll hurt them if you are guilty of what they may typically call professional negligence. Both they and you no doubt sincerely hope no such thing will ever happen – but they may well be asking themselves the question what if?

They may well want to see that in such, hopefully unlikely circumstances, they may be able to recover some of their costs and damages through being able to sue you for professional negligence.

So, they may insist upon working with management consultants that demonstrate maturity and professionalism through having a visible and secure form of management consultants insurance (part of professional indemnity insurance) in place.

It may be a fairly safe bet that they will see the absence of such cover as a sign of a cavalier approach to business engagement rather than a sign of your confidence that nothing can go wrong!

Fault – a secondary consideration

In this context, the concept of blame and fault is secondary. If things go wrong in your activities on behalf of your client then it is their perception that counts because that will be the thing that decides whether or not legal action should follow.

If that does happen, you may find yourself on the painful end of some serious legal representation costs even if their action is subsequently unsuccessful.

If the client’s action is successful, then the awards may be staggeringly high and typically you’ll have to find the money yourself unless you have management consultants insurance to help.

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