Professional Indemnity Insurance saves the day for Procurement Firm
One of the effects of the current economic gloom is that it seems everyone is looking for a deal. This is great news for freelance procurement advisors because there is a real demand for their services. However in such uncertain times, when money is in short supply, customers are often looking for every opportunity to make or save a few pounds. This mind set leaves procurement advisors more vulnerable than normal to court action on trumped up charges of poor advice.
Defending claims involving allegations of poor advice can be costly and time consuming, however procurement firms can protect themselves from this type of expense by purchasing Professional Indemnity Insurance (PII).
It is fair to say that sales of PII insurance are not widespread within the procurement industry, this is largely because the drivers to purchase cover that are found in other industry sectors normally arise because of a clients demands. With Procurement Consultants it is different as few specifiers ask for procurement consultants to provide evidence of PII cover.
So how vulnerable are procurement professionals to a PII claim? PI Expert has a wide range of experience in helping Procurement Consultants to find suitable PII cover, but also in assisting clients with claims.
Recently we helped a procurement consultant who had provided advice to their client on a major new purchase. The work involved putting together a tender document and sourcing suitable suppliers. There then followed the typical tender evaluation, interviews and final recommendation and selection.
Although the client signed off the selection of the chosen supplier, they later alleged that a more reasonably priced alternative was available who had been excluded from the tendering process by the procurement consultant. An action was brought against the procurement consultant for poor advice in the selection process.
The procurement consultant asked insurers to defend the claim against him because he had clear evidence both in the original contract with the client, and later in the paper trail of documents as to why the supplier was not part of the final tenders. Insurers successfully defended the claim, however legal costs of £36,000 were incurred in the course of the defence. These were covered in full by the Professional Indemnity policy that PI Expert had arranged.
In today’s no win no fee world there is no doubt that PII insurance should be on every Procurement consultants shopping list. For help and advice please call PI Expert on 01825 745 410