Using the right management consultants insurance plan
Many high level consultants may already have protection in place for their premises or their equipment. They may also have a fair amount of training and experience behind them, but still be without insurance which covers the legal risks which may threaten their business. Management consultants insurance is available at levels tailored to the individual needs of a freelance or company as a whole, and may provide a valuable lifeline in the event the policyholder is sued.
There are virtually no restrictions on who may launch a legal action through the civil courts in the United Kingdom. Therefore a client of yours is more than entitled to launch their own case if they feel you have done a poor job.
For example, they may decided to sue you if you make a costly error in your advice, or in training you give to their employees. if you issue a training programme, or make recommendations which later turn out to have lost a company money rather than helped it to increase profit, they may take legal advice and decide to sue.
This may sound rare and it is by no means guaranteed to happen to every management consultant, but if it does happen it may be very damaging to a firm which has limited cash reserves and no indemnity protection in place.
Defending a case normally involves hiring legal help, and if you lose the case compensation may be awarded against you in favour of the claimant. These costs may run into hundreds of thousands or even millions of pounds, and management consultants insurance with indemnity protection is designed to pick up the bill for you.
In exchange for a regular premium the insurance company may cover your legal costs and compensation bill up to an agreed limit in the event you are sued following a mistake, error or act of negligence.
There may be an excess involved, and the premium cost depends typically on the level of protection you require, plus other factors, but in the event of a lengthy legal case, the management consultants insurance cover may save some businesses from going under.