Why do HR consultants need insurance?
Unfortunate advice
You provide advice, but you often can’t control how it’s acted upon. For instance, if a client decides to let an employee go after a meeting with you, they could blame you if things turn sour. The employee could win an unfair dismissal case if the correct disciplinary process wasn’t followed and the broker may file a claim against you for professional negligence, citing poor advice. Tailoring your HR consultant policy to include professional indemnity insurance can help to cover the cost of defence or settlement.
An office mishap
Working closely with people is part of everyday life for a HR consultant. You might visit an organisation to present their refreshed HR policies and procedures to the board. Simply plugging in your laptop charger might create a risk. For instance, if an employee of the business doesn’t see the cable and trips, you could be liable for their injury. Public liability insurance can assist with the legal costs, compensation and expenses if the individual in question decides to make a claim against your business.
Loss of data
Clients routinely share delicate information for you to advise on. While you always take great care with this responsibility, you might accidentally send an email with sensitive data in a spreadsheet to the wrong client. This kind of data breach can be being damaging for the reputation and finances of both you and the affected client. Taking out Hiscox cyber and data cover as part of your HR consultant insurance can assist with quickly getting you back on your feet after an incident.
What insurance is available for HR consultants?
Professional indemnity insurance
Allegations of mistakes or negligence can all land on the doorstep of a HR consultant, so professional indemnity insurance (PI) may be of great reassurance. If you give advice as part of your work, this cover can help protect your business. A client might say your guidance on HR policies caused them some financial loss. If the client takes legal action against you, a PI policy could cover the cost of defending or settling the claim.
Public liability insurance
Working with people is what your role is all about, so regular contact with members of the public comes with the territory. Claims can be brought against you by anyone outside your business, so protecting your consultancy may be prudent. Whether you spill coffee on a client’s expensive projector equipment, or someone injures themselves on your banner at an industry event, public liability could assist with legal costs and compensation pay-outs.
Employers’ liability insurance
Employers Liability insurance is often legally required (external link) for any business that employs staff. A HR consultant is an expert in employment policies and procedures – still, sharing this knowledge doesn’t exclude you from problems that can land at any business owner’s door. Imagine you’re working with a new client to implement an efficient payroll system. One of your junior employees might develop repetitive strain injury (RSI) and say it was caused by working overtime hours on Excel. In a case like this, employers’ liability insurance can help a HR consultant to pay their way through the legal process.
With Hiscox, a HR consultant can also tailor their policy to include other insurances such as portable equipment insurance, personal accident cover, cyber and data insurance, office cover and legal protection.
Still have questions? Contact us by phone or email.
These are just some of the types of business insurance we can offer HR consultants. We can build cover into a policy tailored to the requirements of your business.
Get your quoteInsurance for HR consultants: FAQs
What does professional indemnity insurance cover for a HR consultant?
Professional indemnity insurance with Hiscox covers the following:
- Professional negligence
- A breach of a duty of care
- Unintentional breach of confidence
- Lost or damaged documents
- Negligent misstatement or misrepresentation
- Defamation and breach of copyright
While it’s not a legal requirement, professional indemnity insurance can be a key cover for a HR consultant as it can cover you for the very nature of your work.
Offering professional and expert guidance can come with the risk of a client claiming you made a mistake or your advice was poor, so PI cover can help HR consultants in these instances.
How much professional indemnity insurance do I need?
How much cover a HR consultant may require for professional indemnity insurance will depend on what it would potentially cost your business in a worst-case scenario.
To set your policy limit, you should calculate what would be enough to account for the cost of defending or settling claims in the context of your work. How much financial harm could come to your clients because of the services you provide, including HR advice?
This might involve reading though contracts and finding the value of your agreements. You may even wish to consult a professional body or other contacts you have in the industry.
Read our FAQ guide to help calculate how much professional indemnity insurance you may need.
What qualifications do you need to be a freelance HR consultant?
HR consultancy doesn’t necessarily require specific qualifications, though an advanced knowledge of multiple areas of human resources is often essential. This means, in practice, many freelance HR consultants will hold qualifications such as a degree in human resources, or a Chartered Institute of Personnel and Development (CIPD) qualification at Level 5 or above. Many consultants also build up industry experience before they go freelance.
For this reason, if you make a claim on your business insurance, we may ask for proof of qualifications or experience to verify your HR consultant credentials.
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