The basic elements of management consultant insurance

July 16, 2009 · Filed Under Management Consultant Insurance · Comment 

One of the trickier tasks when setting up a business can be sorting out what type of insurance cover is needed. Some types of business actually need some types of deal in place by law, including the likes of public liability insurance and professional indemnity insurance. Examples of professionals which may need this type of cover by law include architects, solicitors, and accountants. Other professionals may not have to have protection in place as a matter of course, but may have been thinking about it thanks to some of the financial and practical benefits. Management consultant insurance is an example of this kind of cover which can provide tailored insurance just for this type of professional.

This kind of cover will normally include an element of indemnity insurance and also public liability insurance, often as an option or included in the price. Management consultants could be classed as one of the brands of professionals which are at risk of legal action, and may want their own personal policy to protect against this.

Indemnity cover cannot stop somebody from being sued but it can prevent some of the financial difficulties associated with it. It protects somebody in the event they are facing a legal claim following a mistake, omission, or act of negligence. This kind of cover will protect someone whether or not the claim is valid.

It will effectively pick up the cost of someone’s legal bills for defending the case against them, and management consultant insurance will even pay the cost of any compensation which happens to be awarded against the policyholder. This can at least mean that someone’s defence is taken care of by the insurance, which can make things considerably easier, particularly for businesses which do not have deep pockets.

For example it could pay out if somebody is accused of offering advice during an assignment which the client believes is not useful or which actually harms them financially after they have followed it. After claiming on a policy the management consultants legal costs would be covered right the way through a case to its conclusion, provided they stay within a set policy limit which is laid down when the cover is taken out.

To get this kind of insurance you can contact all sorts of insurance companies which specialise in professional insurance and can provide somebody with a number of quotes. The cost will be connected to the policy limit, which is important because naming an amount which is too low will mean somebody could end up under insured in a legal action, and if it is too high they would paying for a level of cover which they don’t really need.

These are the basic principles of management consultant insurance, which remain the same across all sorts of policies. The key element to remember is that they could save a business thousands of pounds all the way up to millions, should they face a costly legal action following a dispute related to an assignment.

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.

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.

Why Take Out Management Consultant Insurance?

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

Are you wondering whether management consultant insurance is worthwhile? Working as a management consultant requires you to look at other businesses and analyze how they could potentially improve. It is your job to help the company to move forward and therefore management consultants play an essential role for any company who hires them. Unfortunately your advice can sometimes backfire and if something were to go wrong, the company could blame you.

If a company loses out financially and they feel it is because they followed the advice that you gave them, they could make a claim against you. That is when you would need management consultant insurance.

How Management Consultant Insurance Helps

Your main concern as a management consultant is whether the advice that you are giving is relevant, honest and beneficial. Just like with lawyers and other professions which provide advice to third parties, you need to ensure that you are giving the best advice possible if you want to avoid costly claims against you.

However, as well as being accused of giving bad advice, there are also other things that could be problematic. Management consultant insurance covers things such as breach of confidentiality, defamation, loss of documents or data and damages and injury. You could accidentally cause damage whilst you are on the third party’s property for example. Perhaps you picked something up and dropped it, or maybe you tripped and fell into some equipment and you damaged it. Whilst it would be an accident, it would still cost the third party money to replace whatever was broken. So a claim could be made against you.

You may be thinking “how likely is it that I will trip and fall over and break something or injure somebody?”. Whilst the likelihood of something like that happening is extremely low, it can, and does, still happen. So wouldn’t it make sense to cover yourself in case the unlikely were to happen?

Overall management consultant insurance is considered an essential type of insurance that all management consultants should have. Could you really afford to pay out potentially thousands of pounds worth of compensation or hundreds of pounds worth of legal fees? If not then you need to protect yourself and your business by taking out adequate insurance.

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