Points to note when buying management consultants professional indemnity insurance
If you run a management consultancy business, you may think that nothing will ever go wrong – for example, you will never be sued; an employee will never act dishonestly; or you will never be accused of negligence. However, some things are beyond our control and things can, and do, go wrong. Management consultants professional indemnity insurance is designed to help protect you and your livelihood in circumstances such as this by protecting your business in respect of any legal liability which arises out of its exercise and conduct.
What are its benefits?
There are different types of professional indemnity insurance (PI insurance) and, often, different levels of cover too, which can help protect you and your business against the financial fallout of a claim being made against you (this may include any legal defence costs and help with damages awarded to the third party – up to the policy limits of course).
What to look for when buying cover
As highlighted above, there can be differing levels of cover depending on the PI insurance policy you buy including whether it is trade-specific (eg insurance for management consultants).
Things to look out for when comparing management consultants professional indemnity insurance may include:
- checking how much any excess would be in the event of a claim. Most professional indemnity policies will have an excess if you make a claim;
- the sum insured (ie the amount of cover you have) is of great importance as being under insured means you will have greater financial responsibility should a claim be made against you. Some of your clients may insist that you have a minimum sum insured in order to provide them a service, so do check;
- ensuring that your policy covers all time frames. Often, there may be a delay between an event and the subsequent claim. For example, if you are in the middle of changing insurers, ask your new PI insurance provider if they will accept new claims for prior incidents. This is often known as retroactive period;
- finally, remember when comparing policies that the terms and conditions of the insurance can differ depending on the providers. Therefore, always ensure that you check them to confirm the pertinent points of the insurance.
Having the peace of mind that you have management consultants professional indemnity insurance in place can help you focus on the most important thing – running your business.