Do IT and management consultants really need pi insurance cover? This is a question posed by many different businesses when reviewing their overall running costs. A professional indemnity insurance policy provides cover in respect of economic losses that may arise as a result of errors and/or omissions made during the normal course of a firms business activities. Some IT or management consultants may not view the professional advice they give as being high risk however anyone dealing with other peoples information is at risk of a potential indemnity claim should a situation arise whereby the consultant is responsible for loss of documentation. This could be as a result of a consultant inadvertently leaving documentation in the wrong place, sending an email to the wrong recipient, suffering from a breach of IT security or physical break in – there are many scenarios.
We are constantly reading in the newspapers about Whitehall blunders with confidential information being left in briefcases on public transport or laptops being mislaid. Whilst the information handled by an IT or management consultant may be no where near as sensitive there is still the risk that if client information gets into the wrongs hands (e.g. those of a competitor) then a client may look to claim on a consultants professional indemnity insurance policy for any economic losses they can attribute to the unauthorised release of such information. Whilst a claimant would have to prove and substantiate their case if the company does not have professional indemnity insurance policy cover in place then they many run up thousands of pounds worth of legal costs simply trying to defend their position. Just because a company may win a case in court this does not mean that they will be rebated their legal costs in defending an indemnity insurance claim
Human error as a risk by its very nature cannot be totally eliminated. The above is just one example of a potential claim situation which many businesses may not have even considered there to be a risk. When deciding on whether to arrange a professional indemnity insurance policy we advise companies to consider what risks they are potentially faced with and consider what they would do in the event of a claim if they did not have an insurance policy in place.
Our pi insurance premiums start at £131.25 for IT consultants and £183.75 for management consultants – for more details, instant cover or a quote visit insurance2day.co.uk/professional-indemnity-insurance