Professional indemnity insurance is a policy which is relevant to a wide range of industries and particularly to outside consultants entrusted and brought into a company to help steady the ship and progress the business. Many recruitment consultants and companies themselves require exterior managers and professionals to have interim manager professional indemnity insurance, or its equivalent, before they will even consider using their services.
Professional indemnity insurance protects the sole trader or business against compensation a client seeks if they think an interim manager has made harmful mistakes or been negligent in their work during a contract. Once a successful claim is made it will pay for associated legal costs and even cover the cost of compensation awarded to a client if a defence fails, up to certain pre-arranged limits.
A professional indemnity insurance policy will also often provide cover against loss of or damage to work-related documents, the infringement of any copyright, any defamation, libel or slander action brought against the company or sole trader, and will also cover against any dishonest actions of any employees of a company. So, if an employee of an interim management consultant firm steals from a client, the cover will help defend this case and also cover any compensation award, again up to a limit.
Time frames are important to bear in mind when seeking out professional indemnity insurance. Claims can arrive months after the related event. Some policies are available which will cover a firm or individual if they face a legal case connected to an event which took place before the policy started, provided the policy started before actual notice of the legal action arrived. Businesses may also want to consider the possibility of needing interim manager professional indemnity insurance even after retirement or closure of the business, as a legal action may still be started in relation to a historic event which took place when the individual or company was still operating. Although sometimes an afterthought, cover can be necessary if a consultant or consultancy firm can even expect to land a first client. Once in place it can also provide a valuable safety net and assurance that the firm has every chance of remaining financially secure even in the face of a significant legal claim.