Why management consultant professional indemnity insurance can be important
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.
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