Management consultants often move from one company to the next providing expert-level services. They guide businesses in numerous decisions. This may include financial decisions, marketing efforts, and buying and selling points. In doing so, they provide an expert level of service or professional service.
Even an experienced consultant can provide advice that doesn’t go as planned, though. That consultant could be liable for the losses the company faces as a result of his or her mistake.
In these types of incidents, companies may sue the consultant for losses. Those losses may include lost revenue, employee work time, and product development losses. This can become very expensive.
What Does Professional Liability Insurance Cover?
Professional liability insurance can help to cover the costs associated with such a lawsuit. Some of the types of claims this type of insurance covers include:
- Claims that the consultant provides negligent service. Your management consultancy failed to deliver.
- Claims for failure to uphold a contractual promise. You failed to meet the requirements of a contract, for example.
- You made a mistake in the completion of the project.
- The work completed was not done to the level promised.
In most situations, a company provides a service and gets paid for the service. When a consultant provides a service, it can take time to see if the results were beneficial. It can take time for such a claim of negligence to occur. And, the financial strain on a consultant for a claim like this can be very hard to overcome.
With the right business insurance, this is no longer a risk. As a management consultant, you can continue to provide the services you offer. However, now you don't have to worry about what claims may occur down the road.
When Should You Obtain Professional Liability Insurance?
As a consultant, your goal is to protect your business. You should have a high level of liability insurance to cover your services. Even those consultants with contracts limiting liability still benefit from this type of insurance.
Work with Mitchell & Mitchell Insurance Agency, Inc. to determine the right type of Sacramento professional liability insurance for your business. Knowing you have this protection can make all of the difference in running a consulting business. We are here to help you succeed. Call us today at (888) 512-8878 for more information.