Meet Karmel, a financial consultant based in Calgary who provides accounting advice to clients throughout the province. After preparing and submitting financial statements for Sam, a local small business owner, it is discovered that Karmel made a miscalculation. As a result, Sam owes a large amount of money to the bank, but is unable to make his payments without compromising his business. Fearing more financial strain, Sam sues Karmel for negligence, resulting in $30,000 in legal fees. Luckily, Karmel has consultant liability insurance, which covers Sam for the additional expenses he paid to the bank and a portion of her legal fees.
Like Karmel, a lawsuit alleging failure to deliver a service or poor advice could be detrimental to your business. As a consultant, you face a specific set of risks related to your professional activities, which means you require a policy that matches your business needs.