Good Advice for HR Consultants
Giving advice for a living can be very damaging to your wealth. The risks may not initially be obvious, but a claim can be ruinous and destroy your business, even if the allegations made against you are without foundation.
One of the professions particularly at risk of claims are HR Consultants. HR Consulting covers a wide range of disciplines from drafting policies and procedures to provision of advice in respect of employment law if a business is looking to make redundancies or dismiss employees. HR consultants that do no more than policy and procedure drafting are a relatively low risk in terms of Professional Indemnity Insurance, however those consultants which advise on the more volatile area of dismissal and redundancy (D&R) can find themselves facing all sorts of issues, many of which will lead to a claim under their PII cover.
HR consultants that work in D&R are relying on the employer to give them the whole story. Human nature being what it is often results in the employers story being a one sided version of events where the employer is the” good guy” and the employee is the “villain” of the piece. An employer is likely to overplay the strength of his or her own case and potentially downplay the strength of the employee(s) in question.
A good HR will be able to drill down to a degree past this white noise and establish the facts of the matter, however as a consultant they will have less knowledge of the situation than if they were an internal employee and there will always be a danger that the employer will conceal some facts.
The HR consultant can only act on the information that the employer provides, but if that information is limited or skewed then there is a danger that the advice that they give will be incorrect. Under these circumstances things can go very wrong and if the employer ends up in an Employment Tribunal then the first person in the firing line will be the HR consultant. This is why it is essential that HR consultants not only buy PII cover, but that they purchase the right cover for the area of advice that their business specialises in.
Buying PI insurance as a HR consultant might seem to be quite straight forward, however there are a number of points to bear in mind. One of the most crucial areas to check relates to policy coverage. This might sound obvious, however not every HR consultants policy will cover the breadth of advice that has been provided. It is important to check not only the policy wording, but also the question set contained in the proposal form or statement of fact. A HR advisor that is giving advice on D&R will be considered to be advising on legal matters and it is imperative that the question relating to this on the proposal form or statement of fact is answered correctly. If it is not then the policy will not cover a claim arising out of advice provided in the D&R area.
If you are a Human Resources Consultant and need help and advice about Professional Indemnity Insurance please call PI Expert on 01825 745 410 and we’ll be happy to talk to you.