Why is professional indemnity for project managers important?
The project manager title of your means you have responsibilities and the extent will vary depending on the size of the project and its future impact on your client.
There have been numerous examples of project managers getting involved in client disputes. One of the most common ones are delays or the final capability delivered is deemed not fit for purpose.
But there are some less common accusations which can lead to legal claims as well. Such as your communication style that could upset a client or their staff. Another example is revealing sensitive information to the public or direct competition. You could face serious reputational and financial damage if a situation of this kind isn’t handled professionally.
As a project manager you juggle several balls at any given time, especially on a multi stream project. Despite doing everything right there are always unpredictable circumstances such as unexpected staff turnover or a change in a third party supply chain that can affect the outcome of your work.
Whether or not the issue is your fault may not stop a dissatisfied client coming to you for a financial remedy. You are their project manager and they will be looking to you for answers and solutions, very often at your own cost.
What is project manager professional indemnity insurance?
In essence it is a legal protection cover that comes to your aid if you face an accusation of making a professional mistake by an unhappy client who demands some kind of compensation.
If you have the good sense of protecting your business with project manager professional indemnity insurance, you will have access to legal advice and defence paid for by the insurers. You will also gain that peace of mind knowing that someone has your back and works towards a resolution to save your business reputation. And of course your bank balance will not get eroded by legal fees and compensation amounts if you become liable.
Professional indemnity insurance for project managers is widely available in the UK and the extend of cover or the price you will pay will depend on the industry in which you work. For example architects are considered a much higher risk than IT project managers.
Your industry will also determine how many questions you will have to answer during professional indemnity application and whether you will be able to buy cover online.
When selecting project manager professional indemnity insurance
Price is everyone’s concern and most buyers start with that aspect. However, since professional indemnity insurance is a service, it’s important to understand who you are buying your cover from, how they do business and what will happen in the event of a claim.
Price
The cost of insurance is the primary concern of every buyer in the UK but reviews revolving around cover changes and claims often reveal that it may not be the best strategy.
Fees and charges
Make sure you understand how easy it will be to make changes to your cover and whether it will cost you anything. Also watch for any APR if you select monthly. The interest rate should be reasonable and in proportion to your premium. Is there a policy fee?
Claims
Is it clear to you what is required of you if you find yourself in a difficult situation with a client. Who will be handling your claim, will you have to pay anything toward the legal costs, is compensation part of the deal? Make sure you understand the level of service behind the cover you select.
Cancellations
Can you cancel or ‘hibernate’ your cover when you are in between contacts or decided to finish? Some insurance providers make it lengthy, charge a fee and demand a month's notice. All these are extra costs that you may not want to pay.
Conditions
All insurance providers have the duty to provide access to full cover documentation before you buy. Legal covers contain complex and, let’s be honest, makes for very boring reading. However, the product summary is something you should always read through as minimum. It should outline the basis of cover but also what is excluded.
Other insurance for project managers
Project managers are usually hired to come inside a business or organisation to manage a team of professionals, all working on the same project or projects. How you engage with you client will determine whether you should consider other insurance covers.
Business equipment
If you are responsible for or own the business equipment you use in your job, getting it protected against loss or damage might be a good idea if the cost of replacement or repair would be daunting for your bank balance.
Public liability insurance for project managers
An essential cover if your job involves physical contact with your client, their staff, property or other third parties. The likelihood of someone making a claim against you has a direct correlation with your industry. For example in construction project management property damage claims are more likely than, say, and an IT contractor spilling coffee over their client's expensive piece of electronic kit.
In other words non-manual professions have usually lower exposures but that doesn't mean they should dismiss public liability cover.
