Professional Indemnity insurance is an important part of many professionals' business risk management.
We asked successful professionals in key sectors about their business, and where PI fits into the work they do.
Peter Burden, freelance business consultant and coach, www.seestep.com
What does your business do?
I set up my business about 15 years ago and work as a consultant and coach for a range of different SME clients. About 50% of my work is in digital media, and I also work with travel and marketing companies.
What kind of risks do you have to think about in the day-to-day running of your business?
Actually, I see very few risks in my line of work. This is because I am not actually giving much advice to clients. What I do is work with them to help them find solutions by looking at their setup and posing questions to identify problems and issues. They come up with the solutions and implement them. Mine is more of a facilitator role.
When you first set up your business, did you see Professional Indemnity Insurance as an integral part of set up costs or did you buy into it later?
When I started out, I did invest in various insurances and had some policies for at least the first three years.
What are the key benefits of PI cover for management consultants?
For management consultants who are giving a lot of advice, particularly if they are working with large corporations who might sue, or working in a litigious area such as finance, PI is probably a benefit and worth investing in on a case-by-case basis. The level of cover you need is going to be determined by the nature of the work that you do and will be different for each consultant.
What aspect of your business is most open to risk
I thought about this carefully but came to the conclusion that as my risk is low, I didn’t actually need PI cover. If I were giving lots of advice or working for different types of client, that would be a different matter. My clients are small and therefore also unlikely to sue me. We also get on very well! I don't have an office or have to worry about clients coming to my home, which also means I don't need Public Liability insurance.
What's the most interesting case of a negligence claim you've heard of in your industry?
In small business consultancy, most consultants tend to be involved more on the educational side, helping clients to find solutions. The worst thing that can happen is that the business solution doesn't work and in that case the client and the consultant might part company. The implications for consultants working in IT or finance are more serious as they're sometimes offering a tangible product, helping select or implement major systems, or offering advice that could affect a very specific outcome. If whatever they are doing doesn't work out it could be very damaging and expensive for the client and easily be related back to the work the consultant did. Common-sense tells me they therefore risk being sued.
