A client asking for proof of cover before you start? Professional indemnity for consultants.

A consulting business changes shape with its clients. A management consultancy takes on an interim executive role, and an HR consultancy starts doing recruitment. A training business starts writing the policies it used to teach. A strategy firm starts carrying out what it used to recommend. Each one changes the risk.

A description that matches what you did three years ago is the most common gap we find with consultancies. The usual checks look at the limit and miss it. So the description has to be right when the policy starts, and it has to change when the work does.

One consultants policy we place shows why. It treats your professional business as only what the schedule describes, the page of the policy that sets out your details. It excludes any activity outside that description. It also names work it will not cover, among them corporate advisory, including mergers and acquisitions, and finance, accounting, or tax advice.

Consultancies grow by bringing in associates, so the next question is whose work the policy answers for. On one policy we place, labour-only subcontractors, people supplying their own labour under your direct supervision, are insured while they provide the professional services. On another, the policy covers your liability for agents and consultants, and they are not covered themselves.

Claims about what you said in a proposal or a pitch need cover. Some policies we place extend automatically to consumer law and fair trading claims.

How the cover reaches back to past work, and what happens to it when you stop or change insurers, is on the main Professional Indemnity Insurance page. Consultants change insurers on price more readily than most professions. When they do, the date from which past work is covered can quietly reset. Before any move, read what happens to your cover when you switch insurers or stop work.

A claim does not need negligence either. Anyone who suffers loss because of a misleading statement about your services can bring a consumer law claim within six years of the day the right to sue arose. That can be a capability claim in a proposal, a case study, or a performance representation made on a client's behalf.

Being sued also costs money whether or not you were wrong, and defence costs start with the first letter.

That was a new policy for a Queensland consultant with $200,000 of turnover, a $1 million limit and no excess. Your own premium is priced on your work, so we compare it across the insurers that will cover it.

Panel terms and large client agreements do more than name a number. Four parts of the insurance clause matter.

Cover after the work ends. The clause frequently asks for cover during the engagement and for a period after it. Professional indemnity answers claims made and notified while the policy is in force. A claim about old work needs a policy in force when the claim is made and notified to the insurer. If you stop trading, run-off cover does that job: a fixed term of cover for work already done, after the policy ends. It is typically bought for 12 months, 3 years, or 7 years. As a general indication, 12 months costs about the same as the last year's renewal premium, and 7 years roughly 2.5 times that.

Your subcontractors. The same terms frequently pass down the chain. Bring in a subcontractor and you may have to pass your client's insurance terms on to someone who never saw or priced them.

Proof on request. A client usually wants proof within a short window. That proof is a certificate of currency. It means the policy is paid and current until its expiry date. The insurer gives it to us when the policy is bound, and we issue it to you once the premium is paid. Bound is the point the insurer agrees to cover you. It has to match what the clause asks for.

When the contract ends. The insurance clause almost always keeps binding you after termination, because professional indemnity claims come once the work is finished.

A clause may ask for more cover than you planned for, or for years of cover after the job. Raise it before the fee is agreed, while the cost can still go into your price. Ring us and talk through the work you do and what the clause asks for, and we can tell you where you stand.

For a consultancy the insurance requirement is a contract term, so the clause decides the limit, the years of cover after the job and the proof you owe. We ask about work the business has only just started, because the policy has to describe it.

When a client says your advice cost them money and the policy is one we look after, one of our specialist claims managers takes the claim to the insurer and manages it from there. Your broker, who knows your engagements, stays involved and keeps an eye on it. We follow up when the insurer is slow and push back where the policy and the evidence support a different outcome. Less of the chasing lands on you while you work for your other clients, and we tell you what is happening as the claim moves. The insurer still makes the call.