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Why Smart Consultants Don’t Skip Insurance: Lessons from UK Claim Stories

consultant in a meeting

Running a consultancy means offering advice, insights, or professional services. But even experienced consultants can face unexpected issues. A client misunderstanding, data breach, or service error could lead to serious financial problems. That is why arranging consultant and professional services insurance is something many UK businesses choose to do.

We explore why smart consultants don’t skip insurance, what it may cover, and real examples of where cover could make a difference.

What Is Consultant & Professional Services Insurance?

Consultant and professional services insurance is designed to help protect businesses that provide advice or services. It could apply to:

  • Management consultants

  • IT consultants

  • Marketing or PR professionals

  • Training providers

  • Business advisors

This type of cover helps if a claim arises from a client or third party due to:

  • Professional negligence
  • Breach of contract
  • Data protection issues
  • Defamation or loss of documents

The right policy offers financial protection and peace of mind if something goes wrong.

The Key Covers Consultants May Need

Professional Indemnity Insurance

This is often considered essential. Professional indemnity insurance can cover:

  • Bad advice leading to client losses

  • Mistakes in service delivery

  • Contract breaches linked to work quality

If a client takes legal action, professional indemnity insurance cover could help cover legal costs and compensation.

Public Liability Insurance

If a consultant meets clients face-to-face or has visitors to an office, public liability insurance helps cover:

  • Injuries to the public
  • Damage to third-party property

For example, if a client slips during a meeting, this insurance can cover costs linked to legal actions.

Cyber Liability Insurance

With many services delivered online, cyber liability insurance can cover:

  • Data breaches

  • Hacker damage

  • Loss of client data

This is especially relevant for consultants who handle sensitive information or client systems.

Real UK Claim Scenarios: Why Insurance Matters

Even small consultancy firms can face big problems. Here are examples from UK businesses:

  • IT Consultant Error: An IT firm misconfigured a client’s server, causing data loss. The client claimed £20,000 in damages.
  • Marketing Advice Claim: A PR consultant’s campaign led to reputational damage for a client. Legal action followed, with costs exceeding £15,000.
  • Training Consultant Injury: A delegate fell during a training session, leading to a public liability insurance claim for medical costs.
  • Cyber Incident: A business advisor’s laptop was hacked, leaking client data. Cyber liability insurance helped cover investigation costs and client notifications.

Without the right level of cover, these issues could affect a consultant’s business and personal finances.

How Much Cover Might Consultants Need?

The amount of cover depends on:

  • The size of contracts

  • Types of services offered

  • Industry regulations

We support consultants in arranging tailored professional services insurance policies that reflect their needs. From choosing the right type of cover to setting suitable limits, careful planning matters to protect your business.