Management consultants insurance explained

January 16, 2010 · Filed Under Management Consultant Insurance 

Management consultants insurance is part of professional indemnity insurance (PII) and it could be said that it may in some circumstances save you from financial ruin.

Management consultants insurance – your risks

Your professional liability risks arise from a number of different areas of your day-to-day activities including:

  • you may have regular exposure to confidential client data – misplace it or accidentally disclose it to another party and you could be facing legal action;
  • you may have to comment upon the actions or abilities of individuals and companies around you – cross a sometimes almost invisible line and you could find yourself in court for defamation, libel or slander;
  • your client pays you for advice that they may act upon – if this proves to be significantly inaccurate and they suffer material loss as a result, you could be facing claims for professional negligence;
  • typically you’ll publish a lot of papers and reports – if you have used extensive material you thought belonged to your client that subsequently turns out to be the intellectual property of someone else, you may find yourself liable for huge copyright or intellectual property actions;
  • you make a recommendation that is subsequently judged to be dishonest because you failed to declare a possible conflict of interest.

Professional risk – “it could never happen to me….”

Perhaps it never will, but it may. It’s also worth noting that ignorance or ‘accidental’ are rarely acceptable defences in such cases. The law will look at what damages the plaintiff has sustained as a result of your actions or sometimes inaction, and decide accordingly.

Awards in professional indemnity cases may easily go into hundreds of thousands or even millions, depending upon the situation and severity.

It may also be worth keeping mind public liability insurance. That person who suffers an electrical shock and burns or bad cuts while setting up your equipment for you on a client’s site may well have a legal right to look to you for compensation.

Management consultants insurance

There is perhaps a tendency to think of professional indemnity insurance and public liability cover as something of a luxury you can do without. That’s something you may sincerely believe and will continue doing so – right up until you get hit with the claim or legal action.

The cost of management consultants insurance may be small when considered alongside the risks and potential costs you face if something goes wrong. Finding out more won’t cost you anything and it may be the first step towards putting in place insurance that could prove to be a financial lifeline if trouble strikes.

Comments

Comments are closed.