Management consultancy is an exciting and growing industry, where your expertise are required to assist businesses with their management needs. As a small business owner you also have a lot of your own demands that you need to manage and take care of. One of these is Professional Indemnity insurance*, there to help to protect your management consultancy business.
The world of business insurance, in particular Professional Indemnity insurance doesn’t need to be bamboozling. We’re here to help with a simple guide that gets to the basics of Professional Indemnity insurance and how it can protect your management consultancy business.
What is Professional Indemnity insurance?
There are many different types of business insurances on the market, but one of the key types of cover you may need to look at is Professional Indemnity insurance. Being a management consultant comes with some degree as risk when providing your professional pearls of wisdom to others.
Professional Indemnity (PI) insurance is an important form of protection for businesses that provide
specialist services or professional advice. It is designed to respond to claims against your business for
losses as a result of actual or alleged negligent acts or omissions in the provision of your professional
service or advice. Professional Indemnity insurance will also assist with the legal costs associated with responding to or managing claims which are covered by the policy.
What does Professional Indemnity insurance cover?
It’s important that you take the time to understand what your Professional Indemnity insurance policy provides cover for. If you are ever unsure of what your specific policy includes or excludes, check your Product Disclosure Statement (PDS) or ask your insurance provider for more information.
Professional Indemnity insurance policies usually cover the following events:
- Legal expenses, such as costs related to your legal defence, court attendance, and responding to disciplinary inquiries
- Costs associated with formal and informal investigations of the claim
- Damages awarded to the claimant
- Public relations
- Providing negligent or misleading advice
- Breaches of duty, such as confidentiality and other privacy issues
- Defamation, libel or slander
- Intellectual property and copyright infringement
- Loss or damage to client documents
- Bodily injury or illness caused by the professional services covered under your policy
What it doesn’t cover
Once again, if you are ever unsure about what your Professional Indemnity insurance policy covers and excludes, check your PDS or ask your insurance provider for more information.
This is what is typically excluded from a Professional Indemnity insurance policy:
- Intentional damage
- Known claims and circumstances
- Fraud and dishonesty
- Bodily injury / property damage
Why do management consultants may need to consider Professional Indemnity insurance?
Giving your expert advice to others on all things management is what you are hired to do. There’s no doubt that you are trained, experienced and have the skills and know how when it comes to the management side of things. But the unfortunate reality is that things can sometimes not go according to plan, a client may have an issue with your services and you might yourself facing a Professional Indemnity claim.
These are some of the other key reasons why management consultants may consider taking out Professional Indemnity insurance.
- It may be a contractual requirement- working on contracts for other businesses, part of your contractual agreement may state that you need to have your own Professional Indemnity insurance policy in place. Be sure that you check if there is a minimum amount of cover that you need to have, and that your policy is providing sufficient coverage.
- May be required to join professional memberships- for some industry organisations, it may be a requisite that you have an active Professional Indemnity insurance policy in place. Once again, check what the minimum amount of cover required may be.
- A client may be unhappy with the services you provide, and a mistake, actual or perceived may occur. Professional Indemnity insurance is there to provide some form of protection for your related claim expenses and to help shield your hard-earned business’ reputation.
Getting your Professional Indemnity insurance sorted
Organising your Professional Indemnity insurance for your management consultancy business doesn’t need to be a dramatic process. At BizCover, we’re fans of keeping things stress-free with no dramas. With coverage options ranging from $250k – $10m in Professional Indemnity limits for Management Consultants professionals.
Visit bizcover.co.nz and get insurance to get your Professional Indemnity insurance sorted for your management consultancy business. If you’d prefer to pick up the phone and chat to someone can find us at 0800 249 268.
*This information is general only and does not take into account your objectives, financial situation or needs. It should not be relied upon as advice. As with any insurance, cover will be subject to the terms, conditions and exclusions contained in the policy wording. © 2023 BizCover Limited.