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Why Marketing Consultants need Professional Indemnity & Liability Insurance
Peter Greenham
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Marketing consultants work with companies to create and implement successful marketing strategies to enhance their profitability and brand reputation. Carelessness or negligence in any of the duties performed by a Marketing Consultant may cause clients to seek financial compensation for losses incurred. Professional indemnity insurance protects Marketing Consultants from claims from disgruntled clients, providing a financial safeguard in the event of litigation. Importantly this protection includes defending claims that don’t have any merit but still incur costs of defence.
Why do marketing professionals require Professional Indemnity Insurance?
Imagine the scenario where the advice you give your client, which at the time you believe is perfectly sound, ends up causing your client to suffer a financial loss or negatively impacts on their brand.
An error in a marketing plan, a miscalculation on advertising spends or an advert that causes a PR disaster has the potential to see you in the crosshairs of your once-satisfied client. In events where your mistake is severe enough to have caused them financial loss, they may take legal action against you to recover the costs they’ve incurred.
Professional Indemnity Insurance, often referred to as professional liability insurance or PI insurance, is designed to protect the insured entity, its directors and staff from claims arising from an alleged breach of professional duty owed to a third party. Professional Indemnity insurance protects policyholders in two ways:
- First, the policy responds to protect you against the legal costs of involved in defending yourself or businesses from claims made against you. The policy will respond even in the case where these claims are false. These defence costs can be significant even when defending yourself against a claim with no validity whatsoever.
- Secondly, Professional Indemnity insurance will cover the payment of compensation owing to the third party in the event you are proven negligent.
In our litigious society the threat of claims and litigation is very real and can potentially lead to the collapse of businesses, no matter their size. This is what makes Professional Indemnity Insurance invaluable for every company from major marketing agencies to sole traders.
Additionally in most cases Professional Indemnity Insurance will be a requirement demanded by your clients to be considered for projects. For instance, the terms of contracts will often require your business to maintain a minimum amount of Professional Indemnity Insurance. In such instances, it is essential that you are compliant with the required level of cover.
Management Liability insurance is designed to provide protection to both the business and its directors or officers for claims of wrongful acts in the management of the business.
A business insurance pack can provide cover for your business premises and contents, against loss, damage, theft or financial loss from an insured interruption to the business.
Additionally in most cases Professional Indemnity Insurance will be a requirement demanded by your clients to be considered for projects. For instance, the terms of contracts will often require your business to maintain a minimum amount of Professional Indemnity Insurance. In such instances, it is essential that you are compliant with the required level of cover.
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Peter Greenham
Key Exposures
During the course of business it is possible to unintentionally omit information, breach confidentiality, give incorrect advice or make an error in your judgement which subsequently causes loss to your client. Such errors expose your business to potential claims for the compensation of damages.
Some of the key exposures for Marketing Consultants face on a daily basis include:
- Failure to design an appropriate marketing strategy
- Failure to adequately execute a marketing strategy
- Producing reports that are misleading
- Improper market research leading to incorrect decision making
- Employee dishonesty
- Deceptive conduct in relation to advertising material
Do marketing professionals need Public Liability Insurance?
If an accident occurs which causes bodily injury or property damage to your client or a third party, Public Liability Insurance covers you against claims for damages caused in connection with your business activities. An incident could arise when you have visitors at your offices, when you are in public areas or at your client’s office, being covered through Public Liability Insurance protects your business if you are found to be legally responsible for injuries or property damage caused.
Product Liability Insurance also provides protection against any accidents that may occur as a result of products that you supply or manufacture, including software.
What Now?
Hopefully you know have a better understanding of what Professional Indemnity & Public Liability Insurance means to you as a Marketing Consultant.
If you are a Marketing Consultant with Public Liability and Professional Indemnity needs, we at Chimera Insurance Brokers offer a comprehensive combined Public Liability and Professional Indemnity insurance package designed specifically for professional consultants. You can quote, bind, pay the premium and receive full policy documentation online within minutes. You can also choose to pay in full or by monthly instalments. Get started today!
General Advice Warning: This advice is general and does not take into account your objectives, financial situation or needs. You should consider whether the advice is appropriate for you and your personal circumstances. Before you make any decision about whether to acquire a certain product, you should obtain and read the relevant product disclosure statement.
All information above has been provided by the author.
All information above has been provided by the author.
Peter Greenham, Chimera Insurance Brokers, ABN 88054023318, AFSL 246564
This article originally appeared on Chimera Insurance Brokers Blog and has been published here with permission.
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