Why take out management consultants’ insurance?
It’s to be hoped that you’re never in a position where you need to call upon management consultants’ insurance.
However, such situations may arise a little more easily than you may think.
Economic conditions are always tough and in today’s world people may not be inclined to ‘forgive, forget and move on’ when things go wrong.
A previously excellent professional relationship can deteriorate within minutes and move quickly into attribution of blame mode. Once that happens, you may be very close to people reaching for the phone to call their legal advisors – and taking the first steps on the road to needing to defend yourself from a legal action.
The costs of all of that, even if you win, may be very substantial.
That’s why it may be worth giving serious consideration to taking out management consultants’ insurance.
Typically a policy may offer you protection against things such as:
- unintentional infringement of intellectual property rights and entitlements;
- public liability cover (in the case of some policies this may need to be purchased separately);
- libel and slander;
- product liability;
- the loss of documents or data, etc.
The amount of cover provided would typically depend upon the cover levels you have purchased. Before trying to economise in that area, it may be worth noting just how big some awards against you may be if you’re sued and lose.
Without insurance, you may be trying to meet those costs out of your own financial reserves.
Nobody can tell you how likely you may or may not be to encounter these sorts of problems. Equally, nobody can predict what would happen should you find yourself at the wrong end of a legal action.
What is clear is that the potential costs involved are huge.
So, you may have a choice:
- continue to ride your luck and simply hope it never happens to you or;
- take steps to protect yourself and your business through appropriate insurance.
Management consultants’ insurance is often referred to as professional indemnity insurance (PII). Finding out more might be a smart idea.