Setting up management consultants insurance

July 13, 2009 · Filed Under Management Consultant Insurance · Comment 

Being taken into a business and entrusted with improving it is a big responsibility, but is often a rewarding and enthralling challenge for a management consultant. Whether somebody is delivering a one-off training session or working for a business over a period of time, their work is expected to deliver results. Although on many occasions assignments will be complete smoothly and satisfactorily, it has been known for external consultants to fall foul of disputes with clients. This is a risk for anybody who provides their advice on a professional basis, which has certain legal risks which not everyone will have considered. Management consultants insurance can help protect against some of these hidden risks by paying someone’s legal fees in the event they have to defend a case.

Management consultants insurance will typically include an element of professional indemnity cover. This is a complicated-sounding name which simply refers to cover which backs up your ability to pay for your legal defence bills in the event you are sued. It applies to allegations you made a mistake in the general conduct of your business. If a dispute is not sorted out, legal action can ensue, which can be time-consuming and expensive for those who don’t have protection.

Cases can drag on for weeks or months, depending on the nature of the complaint, and may get quite far through the courts system, running up significant solicitors’ fees. Worse still, if the case is lost you may be ordered to pay compensation to the client.

Management consultants cover normally includes protection if somebody is accused of making a mistake, error, or omission. It also typically protects against accusations you have accidentally breached confidentiality or lost a client’s data or documents. Some other important extras include protection if the policyholder if is sued for libel or accused of acting dishonestly.

Management consultants insurance always comes with a top limit, which is the maximum amount of legal fees and compensation your policy will pay out for. You can often actually define this and it’s important to get the right amount, so it can be crucial to consider the size of your business and the type of clients you deal with to get the right level of cover and policy cost.

management consultant indemnity insurance professional

June 30, 2009 · Filed Under Management Consultant Insurance · Comment 

Whether your speciality is efficiency, sustainability or cost savings, the job of a management consultant can be a challenging and rewarding role. It can also involve taking on a wide variety of projects at different levels and at times can mean making recommendations and decisions which could make or break a client’s business. While most assignments and projects may go to plan, there will inevitably be some that don’t, and this is why management consultant insurance can be a useful safety net in certain circumstances.

If a client follows a consultants advice but later decides what they were told was of no use or actually lost them money, a client could ask for their money back or worst still, could launch a legal challenge and a claim for compensation, particularly if they feel their profits have been hit as a result of the advice.

Management consultant insurance can be bought which includes professional indemnity cover, a form of insurance which pays out for the legal defence of a case following a real or perceived mistake on the part of the consultant. The normal definition covers allegations of mistakes, errors, omissions or acts of negligence.

Court cases which arise when a client is not happy can be expensive as even the most invalid of claims will have to be defended properly. If a case is lost, and the claimant is awarded compensation by the court, there could again be a considerable bill to pay.

Professional indemnity as part of management consultant insurance would pay both the cost of compensation and the legal cost of defending a case, providing the combined total is within the defined policy limit. Beyond the policy limit any additional cost will be up to the policy holder, so it can be important to select a deal which is appropriate to the size of the business. So a company involving one individual freelance and a small handful of small to medium sized clients may want protection for hundreds of thousands of pounds, while a much bigger firm might want protection for millions.

Deals can also include a handy extra known as retroactive cover – this can provide protection for defending a claim which arrives in future but which dates back to something which happened so long ago it occurred before the insurance was taken out, although the policy applicant must have no knowledge of the impending claim when they take out their policy.

Management consultant insurance is a type of cover used by vast companies with hundreds of employees and by individuals just starting out with a handful of clients. It is a potentially extremely useful way of getting out of a law-related tight spot which could otherwise see some firms fall into financial difficulty or even fold completely.

Useful common elements of management consultants insurance

June 27, 2009 · Filed Under Management Consultant Insurance · Comment 

Because of the nature of their business, many management consultants may already be aware of some of the risks involved when it comes to legal action. While most professional relationships go smoothly and without problems, there can occasionally be a dispute over a mistake or perceived mistake which can lead to a client taking legal action. This can be a particular risk if a client or customer of a management consultant feels they have lost money as a result of following their advice. Management consultants insurance is a product designed to guard against this, and for a straightforward premium can act in the background and be activated if you ever need it.

It can be bought not just for individuals but for freelance consultancy firms with several employees or more. In short, management consultants insurance typically includes an element of professional indemnity cover, paying out towards the costs of legally defending a case. This normally applies to claims that a consultant has acted negligently or provided erroneous information.

Indemnity cover is taken out by a wide range of professional advisers and is no longer limited to the likes of architects and graphic designers. Because many management consultants will operate at a high level within a business, any error can lead to a client losing a considerable amount of money. While the chances of a slip-up may seem slim, any legal action which does result from a mistake can be costly.

Up to the policy’s agreed limits, a consultant insurance deal will often pay for the legal advice and defence relating to a case and even the cost of any compensation awarded in favour of the complainant. This is particularly crucial as depending on the nature of a case compensation can run into hundreds of thousands of pounds or more and policies are often available which cover above and beyond this limit.

Cover can also include an element of public liability cover, perhaps thrown in or available as an optional extra for an additional fee. It can even include a retroactive element, covering any claims which arrive in future but which date back so far they apply to something which happened before the management consultants insurance was bought.

Important elements of management consultant insurance

April 30, 2009 · Filed Under Management Consultant Insurance · Comment 

What protection a company needs and just how much of it is required is an important business decision. For example, if your firm needs public liability cover, just how far should it stretch, and if your business involves a lot of expensive equipment when and where should it be covered? Legal implications can also be important for certain companies, particularly consultants who work on a contractual basis with a series of clients. Among some of the more high profile consultants are management professionals hired by companies to sort out problems or turn departments around.
Management consultant insurance can provide a safety net not just against public liability issues but also other legal matters.

Provided it has a professional indemnity element, a management consultant insurance policy can help guard against some of the more unpredictable legal cases. As a hired professional a management consultant may be held liable if their advice is useless to a company or worse still, actually financially harms it. For example, a management consultant may be hired to deliver a detailed training programme to a number of important staff members for a firm. If some of the advice proves to not actually harm the business, the firm could feel they have lost money and seek compensation through a legal case. Indemnity insurance as part of a management consultant policy would pay for your legal bills related to the defence.

Therefore it can be important to check what is included with a management consultant insurance policy. Products which simply cover public liability would not payout in such circumstances. Indemnity cover applies not just to the fees associated with your legal defence but also any compensation which happens to have been awarded to a successful complainant.

Indemnity cover typically protects against mistakes, omissions, allegations of acts of negligence and unintentional defamation. It also covers legal pitfalls like allegations of breach of copyright or confidence, claims that a consultancy’s employees have acted dishonestly and also may pay out if you are accused of losing or damaging a client’s important data or documents.

Indemnity protection will not payout for an unlimited amount of legal expense, and a policy limit needs to be agreed when you take out the cover. You can often choose a level appropriate to your firm, so a smaller business might want protection for just a few thousand pounds worth of protection, while a much bigger company with a higher turnover might need something stretching to millions.

Management consultant insurance can also be tailored to to provide additional indemnity protection in between policies or changes to the business. For example, retroactive cover provides protection for any legal claims which arrive in future but which date right the way back to before you even took out the insurance. Overrun or run off cover also provides protection for when you are changing jobs, insurers, or simply winding down the consultancy business.

Why management consultant insurance can help in a legal crisis

March 30, 2009 · Filed Under Management Consultant Insurance · Comment 

Although acting as a management consultant can be a thrilling and highly profitable affair, it is not without its legal pitfalls as some professionals will be aware. Offering high level advice to companies who are hoping you’ll make a difference means you are expected to deliver a professional and expert service. If a client ever felt you had fallen below this expectation, they could seek to get compensation. In the worst circumstances they may feel that an error you have made has lost them a considerable amount of profit, and this may lead to a long and complicated court case. But management consultant insurance with indemnity protection can guard against this, helping you financially in terms of legal fees and even compensation.

Indemnity insurance as part of a management consultant insurance policy will cover your solicitor’s fees and compensation payouts resulting from the case up to agreed limits. No one knows what the future holds and a client could sue for what appears a fairly innocuous incident. Legal claims need to be defended properly no matter how valid they are and how much evidence there is to back them up. Hiring help to defend something like this properly is never a particularly cheap prospect and up to agreed limits a consultant insurance policy should pay out as opposed to a company falling into debt in order to keep up with the legal battle.

Normally a professional will be covered by this type of policy if they make a mistake, error, omission, or even if they are accused of acting negligently by a client. Note it will also cover things like the loss or damage of a client’s important data or documents. If a consultancy is big enough to have a number of employees, you’ll also get protection if any of them are accused of acting dishonestly. Breaches of copyright and confidence are also covered, provided they are unintentional. The key thing to remember is that all mistakes must be non-malicious to qualify for cover, a straightforward condition which most people will not need to worry about.

Management consultant insurance will also cover any business no matter how valid the claim is, and no matter how far it gets in the court system. Even if you have to appear at the high court, your legal fees will be paid for provided you are still within the policy limit. This is where it is important to make a decision requiring what level of cover you need. Larger companies may want protection for legal bills running into millions of pounds, while a small organisation obviously will not need this. While it is important to not end up under insured, you also need to decide a level of cover which is appropriate to your budget and needs.

How management consultant insurance could save you from unexpected legal bills

February 20, 2009 · Filed Under Management Consultant Insurance · Comment 

Even with all the planning in the world, mistakes do happen, and they can be particularly costly in a business environment. As a hired professional, a management consultant is expected to help a business grow and become more efficient. Depending on the tasks they are assigned, they may be required to increase profits or simply pass on some specialist knowledge to a group of employees. If a client feels the consultant has done a poor job, and worse, has caused them to lose money, they may seek compensation through legal action. Management consultant insurance which has professional indemnity attached is designed as a safety net against this eventuality.

If a consultant never did face being sued, they would need legal advice and possibly also a lawyer or solicitor to help fight their case. This is likely to cost a considerable amount of money, possibly running into thousands or even hundreds of thousands of pounds, depending on the circumstances. Even invalid claims have to be defended in court, and this is where a management consultant insurance policy with professional indemnity comes in. It effectively pays the legal fees you run up should you ever commit a mistake or act of negligence, or be accused of this, in your day to day work.

It will normally cover omissions, acts of negligence and general errors. No matter how genuine a mistake is, the company may decide to take action if they feel they have lost out because of it. Often disputes can be resolved amicably, and do not reach court, but when they do, they can be stressful, time consuming and expensive.

Management consultant insurance will also pay out should you have to hire help following an allegation of unintentional defamation. It also protects against things like it claims to have lost or damaged a client’s important data or documents. Should your business involve employees, who are accused of an act of dishonesty by a client, such as stealing or fraud, a policy will also pay out for protection.

Cover limits are agreed at the start or the policy, as insurers will not pay out indefinitely. Although you can normally expect a policy to even cover the cost of any compensation that might be awarded to a complainant, this will not be unlimited. The ceiling of a policy is agreed at the start of cover, and you need to consider what level of protection you need. Larger businesses will naturally probably need larger ceilings on their policies.

It is important to avoid being under insured, as any difference in the cost of legal help or compensation awarded will need to be picked up by your business.

Management consultant insurance can also be tailored to certain time frames, and will even protect against any future claims which arrive unexpectedly and date back to something which happened before the policy was even taken out. Should you be concerned about something turning up after your business has finished trading, you have changed insurer, or simply changed jobs, ‘run off’ cover can also be arranged to ensure there is no vulnerable period.

The benefits of management consultant insurance

January 30, 2009 · Filed Under Management Consultant Insurance · Comment 

Getting insurance cover in place is important, whether you are a home owner looking to protect your house and its contents, or if you are a motorist obliged to get protection by law. But cover goes beyond domestic circumstances and can be applied to commercial environments where professionals are at risk. A management consultant, as a hired expert, is expected to deliver the highest standard of service to clients. Should someone feel they have fallen below this obligation, they can pursue a legal action. Court cases are a commercial risk, but you can guard yourself against some of their implications with management consultant insurance.

This type of policy will normally include professional indemnity, meaning it will pay for the cost of defending a court case if you are ever accused of making a costly mistake. If a client feels an error which is your responsibility has lost them money they could seek compensation for what is called a financial injury. Professional indemnity as part of management consultant insurance will pay the legal cost of defending a case related to any mistake, omission, or act of negligence.

A policy holder does not even have to prove whether or not the allegation is correct. That is up to lawyers, and an insurance payment to hire a legal help will not be dependent upon the strength or validity of the complainant’s case.

Management consultant insurance with professional indemnity will normally involve an excess, as with other types of insurance, but beyond this will pay for the entire cost of getting a solicitor to act on your behalf in court. It will even pay any compensation which is awarded to a successful complainant. However, as you might expect, it will not pay out indefinite amounts, and each policy comes with a ceiling attached. This means you will be liable for any legal bills going over this policy limit. However, this type of insurance is normally quite flexible and an estimation can be made as to how much cover you will need. The size of your business and the amount of responsibility you have on a day-to-day basis may determine this.

Policies protect individuals or consultancy businesses, and will also guard against other things like allegations of unintentional defamation, alleged breaches of confidentiality or copyright, and will even apply to claims that you have lost or damaged a client’s important data or documents.

Sometimes consultants decide to retire or change their field of expertise and go into a new job. In such circumstances insurers can normally provide management consultant insurance with run off cover, providing a period of protection after you have ceased trading, ensuring you do not fall into the trap of being without cover when an historical claim arrives.

Does your business need management consultant insurance

December 16, 2008 · Filed Under Management Consultant Insurance · Comment 

Provided the right preparation has been made, there is no need for a management consultant to unduly fear making a mistake while on a job. Communication with clients is vital, as many working in the business will know. An ability to stay focused and a good attention to detail are also attributes that a management consultant needs. However, even some of the best in the business know they are not superhuman, and this leads some to arrange a possibly useful safety net in the form of management consultant insurance.

A simple piece of information delivered wrongly in a training session or a wrong recommendation to move or re-train a key member of staff for a client could lead to the company concerned losing money. Of course, not everything is completely clear cut and many disputes can be ironed out amicably. But when a matter ends up in court after a client decides to seek compensation, the consultant can be left with a huge headache.

Even allegations which are false or incorrect will have to be legally defended, and a management consultant insurance policy which includes professional indemnity could help protect someone from the worst effects of defending a legal claim. A typical policy will pay out and cover the legal costs of fighting an action, up to limits set at the start of the policy. An excess may well apply, and this can also be agreed when cover begins, but cover will normally be provided all the way through the defence of a case following a mistake, act of negligence, or simple omission.

All the management consultant has to do is decide what level of cover they need, and this will often be dictated by the type of clients they normally deal with. Those who work with large multinational corporations might want protection for legal bills which run into very large amounts – of course, premiums are priced accordingly, and someone operating on a much lower level can usually expect a smaller policy price.

A management consultant insurance policy with professional indemnity typically includes cover if the individual or company is accused of breaching a client’s confidentiality or copyright. If a consultant is entrusted with a client’s data or documents, the average policy will normally protect them if this is lost or damaged.

It is important to also think about the potential risks of ending up without cover. This can happen when someone changes insurer or winds down their business. If a policy ends, and a fresh legal claim then suddenly arrives, the person may still have to fight the action without the aid of insurance. For this reason many people investigate management consultant insurance which includes retroactive cover for past events relating to before the start of an active policy, and run off cover, for after a firm stops trading.

Choosing management consultant insurance

November 30, 2008 · Filed Under Management Consultant Insurance · Comment 

As a high-pressure job, the role of a management consultant can be both difficult and exhilarating. Quality training and preparation usually means everything goes smoothly, be it passing on new skills to a team of people or conducting an in-depth performance analysis for a firm. Mistakes are rare, usually because the nature of the business means communication breakdowns, misunderstandings and mix-ups are not commonplace. However, this is an area where a slip-up can be very costly indeed, and this is why many advisers take out management consultant insurance as a way of ensuring they have protection should the worst happen.

A problem can quickly turn into a crisis if a client realises they have lost money because of a mistake made by a management consultant. Some will be minded to seek compensation through the courts for their loss and this can mean a long and complicated legal case. A client may even choose to sue simply because they are unhappy and not because they have suffered a loss as a result of the actions of a management consultant. Unfortunately even these invalid claims will need to be defended, and this can lead to a big legal bill.

Management consultant insurance policies will not only pay the costs of defending a claim, they will also pick up the tab in respect of any compensation awarded to a client, up to limits set out at the start of the policy. Besides straightforward mistakes made on the job, cover will also be provided for other pitfalls such as libel actions following unintentional defamation, accusations of breach of copyright or confidence and even dishonest actions committed by a consultant’s employees.

Some experts working in the area will deal with high-level problems being experienced by high-profile clients. This can mean masses of responsibility and this can lead to a need for a higher level of cover. In this sense management consultant insurance can act in much the same way as other types of insurance. A policy holder must decide what amount of legal fee and compensation cover they want – be it £50,000 or £1 million, with premiums increasing accordingly.

Other extras which may or may not affect cost include whether public liability is included or not, and whether any tailored time periods are applied to the policy. These might include what’s know as ‘run off’ periods for consultants retiring, stopping trading or changing insurer. Another option is ‘retro active’ cover for any claim which arrives relating to an event which took place before the policy was even taken out.

Although risk is part of any job, it can always be managed and an insurance policy can help minimise the impact of an otherwise stressful and costly legal claim. This is why even smaller firms and independents choose management consultant insurance.

Management Consultant Insurance

October 30, 2008 · Filed Under Management Consultant Insurance · Comment 

Setting up a business often involves considering what sort of insurance might be needed along with the usual equipment, premises and training considerations. A management consultant, as a professional providing advice to businesses, is no different. Typically seen as an expert in their field, a management consultant is often relied on by businesses and organisations to provide guidance on efficiency and even to improve financial performance. Although it is easy to assume mistakes won’t happen, one error or wrong piece of advice could cause financial injury to a client, who could then sue for damages. A management consultant insurance  policy with professional indemnity cover is designed to guard against this.

Professional indemnity cover is designed to kick in if an individual consultant or specialist firm faces legal action because of a mistake or error which was caused during the conduct of the business. In a nutshell, it will pay the legal bills of defending such an action. Lawyer’s fees can run into thousands or pounds or more, even when a case is defended successfully, and an individual or business can end up in serious difficulty without the right protection. Many policies will provide cover right from an initial hearing all the way to the high court if necessary, subject to certain agreed limits.

Management consultant insurance
which includes professional indemnity insurance will also provide protection in the face of a range of other legal claims. A consultant could find themselves on the wrong end of a libel or slander action or could be accused of breaching copyright or confidence. These circumstances will typically be covered by a policy.

A management consultant will often find they are given important business documents or data belonging to a client during the course of their work. Should these be lost or destroyed by accident, a policy will also step in to help out with any legal claim that follows. Another potentially useful form of cover, public liability insurance, will also be included with many professional indemnity insurance policies.

Some consultants change insurance provider or do not arrange for management consultant insurance with indemnity cover until after they have been trading for a while. In such circumstances what is known as retroactive cover can be arranged, which will provide protection in the event that a claim arrives which relates to an incident which took place before the cover was purchased. Consultants can even arrange for a run off period, which covers them for a while after they retire or cease trading.

Although excesses and limits apply, as with any insurance, management insurance with professional indemnity cover will typically provide a safeguard against the threat of legal action, which is a significant risk in a legally-aware society. Legal bills can cause financial difficulty, stress and can distract from the running of a business. Professional indemnity cover aims to remove these concerns, allowing a management consultant to go on providing a service to clients even in the face of a court case.

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