A miscalculation on advertising spends, an error in a marketing plan or an advert that causes a PR nightmare could land you in hot water with your once-happy client. If the mistake is severe enough to have cost them money, they may take legal action against you to recover the costs they’ve incurred.
This is where professional indemnity insurance or, marketing consultant insurance becomes invaluable for every company- from major marketing agencies to sole traders.
Covering your advice
Keeping all your clients happy is easier said than done – your advice may not always produce the results a brand envisages, so it is important to ensure that you are sufficiently covered for any legal claims that may be made against you or your consultancy firm.
Professional indemnity insurance, which is also known as PI insurance, is designed to cover you in scenarios where a client loses money due to the advice you’ve given them. It can pay the costs of defending your company against allegations of negligence and any costs you may have to pay to your client, both in respect of your own legal fees and also in putting right the mistake you made in the first place.
A good example would be if a company engaged you to place an advert in a magazine. The client signed off on work but then asked for another minor change to be made, and your company didn’t request sign off from them on the new version before it went to print. There was an unfortunate spelling error in the new version of the advert, but as it wasn’t proofed by the client, it didn’t get picked up. The advert goes to print and a photograph of the mistake spreads virally on social networks in a matter of days. Your client feels their reputation has been ruined and sues you for the mistake.
A claim like this could cost thousands to defend – and without professional indemnity insurance, your company would have to foot the bill.
Other insurance covers for marketing consultants
Have you ever considered what might happen if a client fell and injured themselves on your premises? It may seem unlikely, but if they needed hospital treatment they may make a personal injury claim against you. Such claims can be expensive to defend, but public liability insurance can provide cover for the legal costs in defending the claim, as well as any legal expenses and damages you may have to pay your client. Public liability not only covers injury you cause to others, but also damage you cause to their equipment or belongings – such as if you spilt a cup of coffee over their laptop during a meeting.
Many marketing consultancies use high specification laptops and expensive design software. Business equipment insurance can cover laptops, software and other devices (such as mobile phones) against loss, theft, accidental damage and other incidents. Although it might seem easy to replace a laptop, the cost can be high, and when combined with graphic design software, it could put a nasty dent in your company’s finances if you don’t have it covered.
If you need to make a claim on your insurance policy, make sure you tell your insurer as soon as you can. They will have experienced similar claims and can help you handle the situation most effectively. It’s important not to set on any solicitors before speaking to your insurer, as well – they are likely to instruct a specialist law firm who will give you the best chance of defending your claim successfully.