Why management consultant insurance can help in a legal crisis
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.
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