HR consultant insurance, priced on what insurers print

What insurers print for this trade

Buying cover for an HR consultancy

1. Price the exposure at the size of a tribunal award. The loss a client claims from an HR consultant is usually the award plus the costs of defending it, and unfair dismissal is not the only head of claim: discrimination awards are uncapped. That is why HR consultants are commonly asked to carry limits well above the minimum a general small business policy offers.
2. Check whether you draft documents or only advise. Drafting contracts, handbooks and settlement agreements is a different exposure from advising on a process, and insurers ask about it. A consultancy that supplies template documentation to many clients has a claim that can repeat across the whole client base from a single error.
3. Keep the advice trail, because it is the defence. Written advice, dated file notes and the version of the policy you were working from are what answer a claim that the advice was different. Insurers do not usually require it as a condition, but claims turn on it, and the cost of good record keeping is nothing beside an excess.
4. Look at whether you attend hearings or represent clients. Representing a client at a tribunal is a further step and not every professional indemnity wording contemplates it. If you appear, or if you supply an employment law helpline, say so at quote so the wording reaches what you actually do.
5. Add cyber if you hold employee data. HR consultants handle some of the most sensitive personal data there is: health, disciplinary records and pay. A breach of it is both a regulatory problem and a claim from the client, and cyber cover is what pays for the response rather than professional indemnity.

Common questions

What insurance does an HR consultant need?

Professional indemnity is the core cover because the exposure is financial loss from advice. Public liability is normally added for client site visits, employers' liability is compulsory once you employ anybody, and cyber cover is increasingly bought because HR work means holding sensitive employee data.

Does professional indemnity cover employment tribunal claims against my client?

It answers for your legal liability to the client where the loss flowed from your negligent advice or drafting, which in practice means the award and costs the client says they suffered because of it. It is not legal expenses cover for the client's own tribunal case.

Do I still need cover after I stop consulting?

Usually yes. Professional indemnity is written on a claims made basis, so a claim brought after you retire is only covered if a policy is in force when it is made. Run off cover is what keeps the door open, and it is worth pricing before the last invoice goes out.

Is cover affected by which body I belong to?

Membership of a recognised professional body is a question insurers ask, and it can help the terms offered, but it is not usually a condition of cover. What matters more is the scope of work declared and whether you draft documents or represent clients.

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