Specialized Indemnity Cover a Requirement for Consultants and Interim Managers

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Negligence is a daunting nightmarish term and highly avoidable too. Interim Management Professionals dread these terms and dread much more having to accommodate them in the midst of their interim careers. Professional indemnity insurance policies are a vital requirement for professional Interim Manager.

There are many heads which are covered, negligence being the best known. Breach of duty, civil liability, and loss of information or records, intellectual property disputes...various professional indemnity insurance policies offer various permutations and combinations of all these heads for their clients. A client can sue his lawyer if papers regarding his case have been misplaced. In which case professional indemnity insurance kicks in and the insured interim manager is safe from damages.

Professional indemnity insurance (or PII) is a policy that is available to providers of professional services. Professions that come to mind include solicitors, accountants and architects as well as those from the IT and other industries.

It is likely that you are required by a professional body to take out a certain level of cover. And often in daily business that some large organisations will not deal with you unless they've seen evidence you have adequate PII cover. This is particularly true if you try to win business from public sector bodies.

These policies typically offer an indemnity for claims made by your clients for loss they've suffered a result of negligence that has occurred as part of your work. So, to provide an example, when you have made an error in the design of a building and it collapses, the client could sue you for this loss he has suffered as a result. Claims usually are made for negligence due to your acts (like the wrong design); omissions (like an accountant filing a tax form late); libel and slander.

Professional indemnity insurance deals with a unique set of circumstances in a negligence scenario. It does not cover claims from customers for private injuries sustained in your premises, or the work-related illnesses of the workers, for example. If you do not have cover for these risks, you may need to talk over with your insurance provider about further policies.

Premiums are likely to be determined by the worth relating to transactions and projects that you work on. So, going back to the architect's example, for those who design shopping centres for a living, you may require more cover than someone who designs individual residential houses, since the sums involved are larger. As with other insurances, providers assess the risks of providing your cover when deciding just how much you should be charged. So a firm with an unblemished record may pay less for their cover than a firm who regularly claim on their insurance.

Search for the extent of the excess relating to the professional indemnity insurance policy. The excess is a portion of the claim that will not be met from the insurer which you, the insured, must pay before receiving settlement through the insurer. Consider your claims history and the value of the projects you work on to determine what could be an appropriate excess for you. Also, check the terms and conditions fully.

Professional indemnity insurance claims are not, as is commonly assumed, solely the experience of those who churn out work containing technical deficiencies. They extend to cover situations through which consultants probably did nothing wrong however the client made a loss and decided to attack all potential sources of compensation; or the contractor made errors and subsequently went into liquidation; or there have been a lot of parties involved, all with different versions of events, that criticism of the consultant was an inevitability.

All consultants, therefore, need to guard their assets against claims. This is partly achieved by maintaining professional indemnity insurance cover but as long as the terms of coverage are suitable and the limit of indemnity is adequate.

All practices, even those with clean claims records, should review their limit of indemnity as being a matter of course at each renewal and increase it if appropriate. The incidence of claims exceeding the limit of indemnity is already much greater it was and is a trend which is set to continue. Consultants whose liability exceeds their insurance need to fund the balance from their own assets to the extent they can.

For anybody who is a professional interim manager you can usually be asked by a service provider for evidence of £250k of Professional Indemnity at least before commencing an assignment.

Article Source: http://depositarticles.com/

Professional Indemnity Insurance for Consultants and Interim Managers Beacon Interim Management, provider of specialist Interim managers for the Public and Private sectors

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