As the work force becomes more contract orientated, there has been an increase in independent consultants. These individuals are self-employed and hired by firms per project relating to their discipline. Any work performed as a consultant is not covered under the contract companies insurance. This means if there was any suspected negligence causing a financial loss or injury to the client the consultant is liable. For consultants it is imperative to have Professional liability in place before obtaining contracts for service.
Professional liability insurance is also known as Errors and Omissions and is available for many consultants in varying self-employed occupations. Examples of these are Management, Information technology, Human Resources, Project Managers, Architects, Engineers, Health and Safety, Personnel Trainers etc. The most common claims are Financial Loss and Bodily Injury. For Example, a Management Consultant encourages a company to change business practices that then incurs increased costs that they cannot endure. For Bodily injury, a Health and Safety consultant provides a protocol for a business and one of their employees are injured. In both examples, the consultant may not be responsible, but it still needs to proven. This is where Professional liability insurance is important as it provides legal expense for defense. Due to the increasing litigious nature of society all consultants need to obtain professional liability insurance for the advice they give.
Aside from coverage of claims, consultants will find that having a policy will allow them to do more business. Most company protocol will insist on consultants providing a confirmation of professional liability insurance before accepting a contract. Given this, it is prudent that consultants have coverage in place before prospecting. Professional liability protects independent consultants from potential litigation and demonstrates competence for potential clients.
If you are interested or have any questions please contact me.
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