Demystifying PI Insurance
Management and business consultants provide guidance that can determine their clients’ success or failure. For example, a marketing consultant hired to execute a new marketing strategy could fail to generate the expected results for a client. When the business experiences financial losses as a result, the client could fault the consultant and seek compensation. A business consultant hired to help a client adopt new technology to operate more efficiently might recommend an ineffective software product, causing delays in the implementation. This could generate severe consequences for both the firm and the consultant.
Being a small-to-medium-size enterprise (SME) only heightens these risks – and many consultants fall into this category. While consultants often operate in small firms, they may be advising much larger organisations. This exposes them to levels of risk which tend to increase further in a difficult economy. It’s critical for consultants to have the right risk protection for their needs.
Who needs PI insurance cover?
Professional indemnity (PI) insurance can help protect business consultants from the financial consequences of claims related to errors, omissions, or negligence in their professional duties. The cover could kick in if a client accuses their consultant of breaching their contract, failing to perform, or providing incorrect or inadequate advice, for example. Often, larger businesses will insist that their consultant obtains this insurance cover before they will consider entering into a relationship with them.
But even though consultants need PI cover that addresses their specific risks, they may lack adequate protection – or their brokers may be reluctant to shop around for it.
“Understandably, brokers can be concerned about how PI protects their clients, given the perceived complexity around the contractual nature of consultants’ work,” said Stuart Mosley, SME New Business Manager at Travelers. “They want to make sure they don’t leave their clients exposed with insufficient cover. But it’s important for brokers to regularly check that their consultant clients have the right protection in place, and that the premium paid is assessed against the market. Differences in wordings and cover mean that not all policies are equal – and at Travelers we can ensure clients don’t experience any break in cover when making a change, via the ability to offer retroactive cover for claims notified prior to inception of the new Travelers policy."
PI cover built to protect consultants
To help address uncertainties and concerns about PI cover, Travelers offers a PI Combined product, designed around the needs of SMEs. As well as the all-important PI coverage, it’s also packaged with comprehensive protections ranging from employers’ liability to public and product liability insurance. There is an option to select a retroactive date of cover to ensure the policyholder has no break in protection during the transition to a new insurer.
“Often, management and business consultants are operating in one- or two-person firms,” said Jonathan Forster, SME Distribution Director at Travelers. “SMEs need the sense of security that a product, such as PI combined, can provide. Travelers is a longtime market leader in providing this protection for solicitors so both brokers and their clients can have peace of mind that they are in safe hands.” And as a winner of Insurance Business UK’s 5 Star Claim award last year, consultants can be safe in the knowledge that if a claim does arise, it will be handled by our team of in-house claims experts.
Brokers get direct access to PI experts
PI insurance cover is often perceived to be more complex than conventional kinds of insurance cover. Brokers may have questions about how to find the cover that will best protect their clients. It’s important to ascertain what services clients are providing to ensure the policy protects them in the event of a claim. But sometimes this uncertainty about PI cover can also lead to a ‘set-it-and-forget-it’ mentality that may leave clients exposed. That need not be the case when expert advice is available to help brokers navigate how the cover works.
“At Travelers, our strong technical and underwriting expertise have made us experts in insuring professional advisors,” Mosley said. “It’s our priority to help these clients get the right protection for the risks they face. That’s why we give brokers direct access to our SME underwriters if they need it – they don’t have to rely on a call centre for support. The underwriting team are on hand to help advise and discuss complex cases. Brokers can quote and buy the cover with speed and convenience via the MyTravelers web portal or Acturis, but they also have hands-on support from our experts if and when they need it.”
Find out more about Travelers PI Combined package:
UK brokers - https://www.travelers.co.uk/what-we-cover/professional-indemnity-combined-insurance
Irish brokers - https://www.travelers.ie/products/professional-indemnity-combined-insurance
The information provided is for general informational purposes only. It does not, and it is not intended to, provide legal, technical, or other professional advice, nor does it amend, or otherwise affect, the provisions or coverages of any insurance policy issued by Travelers. Travelers does not warrant that adherence to, or compliance with, any recommendations, best practices, checklists, or guidelines will result in a particular outcome. Furthermore, laws, regulations, standards, guidance and codes may change from time to time, and you should always refer to the most current requirements and take specific advice when dealing with specific situations. In no event will Travelers be liable in tort, contract or otherwise to anyone who has access to or uses this information.
Travelers operates through several underwriting entities in the UK and Europe. Please consult your policy details.
