Consultants use their specialized knowledge to advise and guide business executives. Their purpose is to help clients improve and grow so they may reach an optimum level of success.
So what happens when a client doesn’t achieve the desired improvements or even just perceives that their consultant has not provided the correct advice.
A good way to ensure that their consultancy career is secure is to buy Professional Liability Insurance for Consultants.
Let’s take a closer look at important facts about professional liabilities for consultants so you can understand the outstanding benefits to such a policy.
Contracts Don’t Always Protect You from Liabilities
Perhaps you use a seemingly bulletproof contract when taking on new consulting projects. Maybe you assume your indemnification clause is so airtight there’s no way you could be named in a liability claim. However, the truth is that indemnification clauses do not always hold up in a courtroom. Plus, an indemnification clause may not anticipate all the possible risks that you will encounter while consulting.
Your best safeguard is to purchase a Consultants Professional Liability policy. This way your insurance carrier can absorb expenses and losses resulting from a liability case against you. Furthermore, the Professional Liability Insurance company will be responsible for enforcing the indemnification provision.
IT Consultants Face Higher Liability Risks
Consultants specializing in the IT field are frequently at a higher risk for liability claims. This is because there are so many different snafus that can come up while an IT consultant is doing their work such as designing a new website, reconfiguring a network system, or installing new computer hardware.
For example, IT consultants may upgrade a client’s internal network only for a cyberattack to happen shortly thereafter. This situation could make a customer question how well the IT consultant performed their duties and seek compensation for any damages the breach caused.
Professional Liability Insurance is a sound investment for consultants working in the technical field.
One Dissatisfied Client Could Be Your Downfall
Your customers rely on your expertise to make critical business decisions and they usually pay a lot of money to pick your brain. So, if a client thinks something you did (an error on your part) or something you didn’t do (an omission on your part) resulted in the client losing money, then you should expect to be involved in the complicated world of liability lawsuits.
Unfortunately, responding to a liability lawsuit may result in a lot of missed work hours, legal fees, court costs and the biggest risk of all…having a judge actually side with the dissatisfied client.
If you find yourself in this scenario, you’ll be extremely grateful to have a professional liability policy in place to absorb the costs and hassles.
Professional Liability for Consultants Is Your Best Defense
After learning more about the different professional risks to consultants, it may be more evident why a Professional Liability Insurance plan can be beneficial to your consultancy business.
Up until this point, perhaps you’ve been fortunate to have not encountered any issues with past clients. The reality is that as your consulting projects expand and your reputation grows then you could be putting yourself and your business in peril.
Buying a Professional Liability Policy right now is one of the best investments you can make for your consultancy career.