Typical management consultants professional indemnity insurance features

November 22, 2009 · Filed Under Management Consultant Professional Indemnity Insurance · Comments Off 

A few sensible safety nets may be useful for businesses, particularly if dealing with high profile management decisions. Management consultants professional indemnity insurance may help to protect a professional adviser against unwanted legal claims – and is normally quite flexible in its policy features and costs.

Professional indemnity cover is compulsory for a number of types of business – financial advisers, accountants, and architects may find it is necessary in order to gain membership of professional groups, or to comply with the law. For other types of consultant it may not be strictly compulsory, but may be more than sensible if a company has little other protection in the event they are faced with a court case.

An insurance policy like this may apply to one freelance individual or to a whole company, and normally pays out cash towards legal defence fees and compensation costs which result from a client complaint that you have made an error, omission, or act of negligence in your work.

To give an example a management consultant might be hired to temporarily run a department in an effort to improve its performance. If their decisions, in the opinion of the client, result in the department actually losing the company money, they may decide to take legal action and recover what they have lost.

In such circumstances a consultancy which does not have protection may normally effectively have to pay for their legal bills and compensation themselves, and some cases may run into hundreds of thousands or millions of pounds.

This of course may bankrupt a good deal of companies, which is why management consultants professional indemnity insurance may be a worthwhile option.

It normally involves a payout limit beyond which the insurance company may not cover any further costs for legal defence or compensation. This limit is important because it may run out in the middle of a particularly lengthy case and leave the policyholder picking up the rest of the bill. This is why top cover limits on many policies stretch to hundreds of thousands or millions of pounds.

Not every consultancy may need the same level of protection, however, and a degree of judgement is needed to asses how much protection is really necessary – a freelance working with medium-sized clients may want a higher level of protection than a large consultancy dealing with international firms with large turnovers, for example.

Besides errors, this form of protection normally also pays out in the event you are sued for defamation, or for other incidents such as if you lose important data or documents belonging to a client. Besides this it may protect against claims that you or your employees have acted dishonestly, and perhaps defrauding a client, for example.

Often extra options may be arranged, such as what is known as runoff protection, providing extra cover for when the company is in between insurers, or for when a consultant is winding down the business.

Crucially, management consultants professional indemnity insurance does not typically require that the claim against you is false in order for a payout to be made. Provided any mistake is unintentional, and not malicious, it may well be covered by the protection even if the claimant’s allegation is entirely true.

Arranging effective management consultants professional indemnity insurance

October 22, 2009 · Filed Under Management Consultant Professional Indemnity Insurance · Comments Off 

All professional consultants are expected to deliver a high standard of service. In many cases there may be extra pressure on management consultants to do a good job as they may offer a high level advice which some companies may be relying on to deliver significant results. As such you may face serious financial and practical challenges if you are ever sued because a client is unhappy. Management consultants professional indemnity insurance may help to protect against the financial impact, so taking away some of the stress associated with court action.

Indemnity cover can be used not just by management consultants, but by a wide range of professionals, such as accountants, doctors, architects, and graphic designers.

It may pay your legal costs and even any compensation awarded against you if you lose a court case. Payouts apply to simple and straightforward hearings right the way through to an appearance at the high court if necessary and if you are still within the policy limit.

Being sued often means hiring legal help and this may be very expensive. On top of this, if the court rules in favour of the claimant, you may be ordered to pay them compensation and even pay their legal bills. This is the type of circumstance in which a case may end up costing someone millions of pounds in some circumstances.

A policy like this pays out in the event you are accused of making a costly mistake, error, or committing an act of negligence. Although obviously not every error results in court action, if you did cost a client a considerable amount of money by delivering erroneous advice, they may seek to recover any money they feel they have lost.

On top of this management consultants professional indemnity insurance also typically pays out against claims like unintentional defamation, breach of confidence or copyright or a claim that you or an employee of yours has acted dishonestly.

It typically even applies should you lose an important client’s data or documents, for example if you accidentally lost, destroyed, or wiped a hard drive.

All policies come with set limits, essentially a ceiling above which the insurance company may not pay for any more legal fees or compensation. This is important because typically it relates to the premium. The higher the payout limit, the higher the premium may be.

Also, of course if you go above this premium limit, you cannot expect to get any more cash towards legal defences so getting it right may be crucial. You may want to look carefully at your turnover, client list, and the type of work you do. Professional help may be useful in helping to decide on your level of management consultants professional indemnity insurance.

Choosing a management consultants professional indemnity insurance plan

September 20, 2009 · Filed Under Management Consultant Professional Indemnity Insurance · Comment 

The work of a management consultant can be high-pressured and high-profile. But it can also involve high rewards both financially and professionally. However, the job also carries a degree of risk along with the pressure. As a perceived expert in their field, a consultant is expected to do a job which delivers results, and if a client feels they have fallen below this standard, they can take legal action. This is why many people working in the sector take out management consultants professional indemnity insurance.

Professional indemnity insurance, sometimes referred to by insurers as PII, is a form of cover which typically pays out in the event the policyholder faces legal action. It is different to employers’ liability insurance and public liability insurance, in that it applies in the event the policyholder is sued due to a mistake which has cost a client money.

For example, the client may decide to take legal action because a restructuring programme drawn up by a management consultant has actually lead to the company losing money rather than saving it. This is often referred to in the business as suffering a financial injury and the aim of the client is to recover what they have lost through court action.

This will often mean hiring legal help to defend a case which can be expensive. Management consultants professional indemnity insurance will pick up the cost of the legal defence and even any compensation if it is awarded against the policy holder.

The benefits of this are obvious as in some circumstances legal bills can spiral out of control during a civil court action. Professional indemnity insurance will typically protect the policyholder whether or not the claim against them is valid and will even pay for the cost of compensation. Protection applies right the way through the courts system all the way to the High Court if needed, provided somebody stays within the policy limit.

This limit is set when the policy is taken out by the policyholder and companies which have large client lists and considerable turnovers may want protection for millions of pounds, while smaller companies will not need this.

It is also possible to arrange useful extras on a policy, such as an excess, or protection which will apply to any new legal claims which refer back so far they apply to something which happened before the policy was even purchased, known as ‘retroactive cover’.

Management consultants professional indemnity insurance is therefore seen by many as a crucial safety net and method of protecting against the considerable financial risks of a legal action. Premiums are priced according to the policy limit and can also be affected by the professional’s qualifications and experience, meaning a deal is available for every level of consultant.

Typical extra options for management consultants professional indemnity insurance

Management consultants professional indemnity insurance in its simplest forms pays for the policyholder’s legal costs in the event they are sued for an error committed in their business – but normally it can go much further than that. Depending on the deal it can include various extras and some insurance companies even tie in other forms of cover in with it for an overall package price.

Checking what a deal will actually pay out for is important – normally it is expected to cover legal bills in the event of an accusation of a mistake, omission or act of negligence. This often also includes claims that a consultant has lost or damaged data or documents belonging to a client, or that they have unintentionally defamed someone and therefore face being sued for libel.

Deals frequently protect not only the cost of hiring legal help to defend a case – which in some circumstances can be a massive expense, but also typically cover the cost of compensation should it be awarded against the policyholder who loses a case. The maximum payout limit on a policy is therefore important and is often down to the policyholder’s own judgement. This can be based on the size of the consultancy firm, its clients and the size of the contracts it is asked to undertake – some firms may require higher cover levels, and therefore may pay higher premiums, than others.

Insurers may offer some extras with management consultants professional indemnity insurance including public liability insurance either as an optional extra or as part of the price.

A few other features can be useful too. A common one is what is known as retroactive cover which means the cover will pay out if the policy holder faces a legal challenge in future which relates to something so historical it happened before the insurance was taken out.

For example a management consultant may be hired by a firm in March to provide a series of training sessions to senior staff. The job might be completed and payment processed with the client apparently happy. Then in April the consultant might buy an indemnity insurance deal with retroactive cover and in June get a claim in the post relating to the March assignment which the client says involved advice which actually lost the firm money. Provided the policyholder had no prior notification they were going to face the claim, they may be covered as they would be had the incident itself happened after the policy was purchased.

Management consultants professional indemnity insurance may also offer a run off cover option – this refers to protection which can continue for a period of time even after a consultant has ceased trading, retired or changed jobs. The risk of legal action relating to a past contract does not go away simply because someone has left their position, but remains for a period of time after the event.

Legals claims need not be so damaging with management consultant professional indemnity insurance

Even the most well trained professionals in the world make mistakes from time to time, that much is almost certain, but what we can’t predict is what the consequences will be if we ever do make an error. Of course, many mistakes are quite straightforward and easily rectified, but in the world of business they can be costly depending on the circumstances. Some professionals are potentially vulnerable if they make a mistake while on a job, and management consultants fall into this category.

Anyone who provides professional advice to clients on a consultancy basis could face legal action if they ever lose a client money by mistake. This is why management consultant professional indemnity insurance is popular with certain professionals operating in the sector.

Consultants are generally expected to provide a very high standard of service and to deliver visible results. If a company who hires you ever feels you have fallen below this expectation, a dispute may ensue which could end in legal action. In the worst cases a company might actually lose money because of something you have done or failed to do, and they may seek to recover this via compensation. Indemnity insurance pays your legal fees, helping you to pay for your defence and even a compensation award if appropriate.

Even if an error is unintentional it can still be harmful, and therefore it can be useful to have a safety net in the form of management consultant professional indemnity insurance. Indemnity insurance will not only pay out for the defence of claims that you have made a mistake, it also guards against allegations of acts of negligence, claims you have breached someone’s confidence or copyright and even if you lose or damage important information or documents belonging to a client.

In this sense your firm is financially backed by management consultant professional indemnity insurance should it ever face the chances of paying out a large sum of money on a court case due to an error. Indemnity cover can be selected and tailored to different levels, so a firm may need to decide what limit they want on a policy. Big companies can sometimes need thousands of pounds or hundreds of thousands of pounds or more in protection, but smaller consultancies may not need this.

Why management consultant professional indemnity insurance can be important

February 13, 2009 · Filed Under Management Consultant Professional Indemnity Insurance · Comment 

Getting the right administration and insurance cover in place is part of setting up any business, and the role of a management consultant is no different. Whether you are a freelance or an agency employing a full staff, the responsibilities you take on when completing jobs for clients are significant. Legal wrangles can strangle business and distract from everyday work. Management consultant professional indemnity insurance is a form of cover which will help take off the financial pressure if you ever were to face a court case.

As a consultant, you company will be expected to provide a highly professional service at all times. As such, you are perceived to be an expert in the field, and clients expect to see results. However, if they feel a mistake has been made or they have not got the service they have paid for, a dispute may ensue, which always has the risk of turning into legal action.

This can mean hiring legal help to defend your case, which is never a cheap option. Management consultant professional indemnity insurance kicks in and pays your legal bills and even any compensation awarded against you. It applies if you make a mistake, omission, or act of negligence during the general conduct of the business.

Any error might be quite genuine and unintentional, but if it costs a client money and the dispute cannot be settled, they may seek compensation through formal channels. Some cases can wrangle on for weeks or months and even years, leading to considerable wasted time and legal bills.

If you cannot afford legal defence, you risk either losing the case, or ending up with a bill you cannot pay or which will make a harmful dent in your finances. Management consultant professional indemnity insurance protects your business in that it will stump up the cost.

It normally also protects against things like allegations of defamation or breach of confidence or copyright. Even the alleged dishonesty of a consultancy’s employees will be covered if it results in legal action. As such a policy is designed to tackle any of the types of legal issues which some companies in the industry end up facing.

You will simply need to select the level of management consultant professional indemnity insurance cover appropriate to your firm, as policies do not pay out indefinitely and you need to use a level of judgement depending on the size of your clients and their turnover, and what you normally carry out for them.

How management consultant professional indemnity insurance protects businesses

Management consultant professional indemnity insurance might sound like an expensive and complicated policy. But many people operating in the sector see it as an essential part of their business protection. Professional indemnity essentially protects the policyholder should they ever face being sued following a mistake they have made. Although slip ups are rare, and sometimes have fairly elementary consequences, some errors can be catastrophic and may cost a client money. This means there is a risk a management consultant could face a legal claim at some point during their career.

Professional indemnity insurance is available for a straightforward premium, as with other types of insurance, and guarantees that legal bills for certain types of court cases will be paid, up to certain limits. The normal definition is any case which relates to an error, omission, or act of negligence committed by a management consultant while on a job.

Cover limits are applied by all insurers, meaning the policyholder cannot expect a company to pay out indefinitely. So some policies offer hundreds of thousands of pounds worth of protection for legal bills, or more expensive versions protect someone for millions of pounds worth of cost.

Management consultant professional indemnity insurance is popular with some operating in the sector because it provides peace of mind about what they would do if faced with a legal claim. Court cases are never easy, but can be a nightmare if someone does not have the means to hire legal help. This type of policy aims to take away this concern by not only paying the bills run up by lawyers, but also any compensation which might be awarded to a successful claimant, again up to a cover limit.

Protection is also provided for things like allegations of breach of confidentiality or copyright, unintentional defamation, and the loss of a client’s important data or documents. This means management consultant professional indemnity insurance covers a wide range of bases, and can prove great value for money in the long run. Provisions can even be made so that someone changing insurer, or winding down their business, can have a form of run off protection, ensuring there is never a chronological loophole during which they are not insured against legal cases.

Management Consultant Professional Indemnity Insurance can help protect your business

November 28, 2008 · Filed Under Management Consultant Professional Indemnity Insurance · Comment 

Although it might be what many management consultants thrive on, the profession itself carries an enormous amount of responsibility. A professional can sometimes have the future of a client’s business in their hands. A wrong recommendation can have serious consequences for the firm, and this means the job itself carries a certain amount of risk. Legal cases are a real and significant threat, if not a certainty, and as such many professionals in the sector opt for management consultant professional indemnity insurance – a form of insurance which actually aims to protect a business from the consequences of being sued.

A management consultant can take on jobs for clients which include strategy, structure and human resources issues. Sometimes they will be responsible for helping to form detailed goals and processes for a company, designed to help it improve its financial performance. This means an error in their advice could actually lead to part of a business failing and result in a company losing money, which is sometimes called a ‘financial injury’. The firm concerned may then seek redress through legal action – an expensive proposition for all concerned, including whoever must hire legal help to defend their cause. This is where management consultant professional indemnity insurance can help.

Such policies simply cover the cost of legal expenses incurred as part of a defence to a case following a consultant’s error or omission in the normal course of their work. To qualify for a successful claim the error or omission must be accidental and not deliberate, ie malicious. Other things are also usually covered, such as allegations of defamation through libel or slander or cases related to alleged breach of copyright or confidentiality. Should a management consultant lose important documents belonging to a client or damage them, this will also be covered.

Another handy element of professional indemnity cover involves compensation payments. Should a policy holder lose a case aimed against them and then face a payout to the complainant their insurer will also meet this payment on top of the legal expenses cover. Of course, certain limits apply, and these will normally affect the cost of the premium. For example a policy with £500,000 in total cover is likely to cost more than one with £50,000 in cover.

For any management consultant changing jobs or insurers, ‘run off’ cover is available, which provides an additional period after a professional stops trading or otherwise requires an extra bridge of time allowance. Such added detail can prove crucial in certain circumstances as legal cases can be stressful and expensive, if not thoroughly damaging for some businesses. Management consultant professional indemnity insurance can therefore help a company negotiate almost any sort of legal storm, in exchange for a straightforward premium. In the long run, such an expense could save some businesses thousands of pounds or more.

Understanding Management Consultant Indemnity Insurance Professional Cover

September 15, 2008 · Filed Under Management Consultant Professional Indemnity Insurance · Comment 

When you are looking into management consultant indemnity insurance professional cover , you will notice that there are differing levels of cover available. One of the best types of management consultant indemnity insurance to apply for is professional cover.

Management consultant indemnity insurance professional cover is designed specifically with professionals in mind. All businesses can apply for indemnity insurance, but they do not always need the same amount of cover as a management consultant would need. So when you do look for indemnity insurance you will notice that most cover is general unless you specifically state that you want “professional indemnity insurance”.

What Management Consultant Indemnity Insurance Professional Cover protect against

If you decide to take out management consultant indemnity insurance professional cover then it will typically have a few added extras thrown in. It could be that you get added legal cost help or you could get lower excess amounts or maybe you could benefit from more money in the event of a claim.

Different insurers will offer different extras and so you have to think about what would suit your business the most. Professional cover will help you if you were to be accused of:

  • Negligence
  • Liability
  • Lack of confidentiality
  • Damage and Injury
  • Bad Advice

A claim could be made against you because of a mistake that you have made. Perhaps you had some third party documents that you were looking at to come up with a plan on how they could improve but somehow you have lost them. If the documents were to be found then secrets about that business would obviously be revealed. So you could be accused of a breach of confidentiality and loss of documents. Professional indemnity insurance would give you the funds needed to pay compensation.

In other instances you may not have done anything wrong, but you could still be claimed against. This is especially the case if you have given advice and the company has gone on to lose money that they state is specifically due to the advice that you gave. Even if you know that your advice had nothing to do with it, you would have to defend yourself and legal fees do not come cheap!

Overall management consultant indemnity insurance professional cover will protect you in a number of ways. With differing levels of cover available it would be a good idea to know exactly what it is that you need and how much cover you would like. Professional indemnity insurance can be worthwhile and is a serious consideration for any management consultant.

Why you may need management consultant indemnity insurance professional cover

If you are thinking about buying management consultant indemnity insurance professional cover, then you are making an key decision that will help provide your business with a financial safety net in the event of a claim being made against it. It can help with legal fees and compensation claims.

You may think that buying this cover isn’t necessary or that it would be expensive, but chosen wisely, you can get comprehensive cover at a good price. As to the necessity of it, consider this. Would your business survive if it was faced with legal action against it? One claim could quite simply take your company into financial disaster.

Even the most respectable of businesses could be faced with a claim against it by a dissatisfied customer. Having the financial plan of professional indemnity insurance in place could help protect you and your company.

It isn’t difficult buying your management consultant indemnity insurance professional cover. In fact, getting your insurance can be quick and easy if you go to a specialist broker, rather than trying to find the right deal on your own.
When choosing your cover, do look out for ‘retroactive cover’. This is where you are protected against claims that arise out of work that was carried out before the insurance policy started.
And make sure that you have the right level of cover as well as the correct sum insured. Your broker can advise you on this if you are not sure. Certainly, the sum insured is of great importance as being under insured means you will have greater financial responsibility should a claim be made against you. Depending on your industry, some of your clients may insist that you have a minimum sum insured in order to provide them a service, so do check.

As with all insurance cover, do note that the terms and conditions of the policy will undoubtedly differ among the different providers, so make sure that you fully understand what the cover for each policy entails and don’t just assume that they all offer the same protection.

Financial disaster can be caused by legal action made against your company and this is a worry that all business owners face. But with management consultant indemnity insurance professional cover you can help protect yourself against this.

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