Technical Consultants Insurance
Technical consultancy sits on the boundary between advice and product. Advice on a process, a machine, a material or a specification does not stay on paper: it is built into plant that runs, equipment that is bought, or a product that is sold, and when it is wrong something stops working or somebody is hurt.
That physical consequence is what separates this from the rest of the consultancy group. A management consultant's error costs money; a technical consultant's error can damage a production line, contaminate a batch or injure an operator, which means professional indemnity alone may not address the full range of exposures.
The boundary question matters practically. Professional indemnity answers the advice, product liability answers harm caused by goods supplied, and a consultant who specifies, supplies or commissions equipment can find a claim falling between the two. Where the two policies sit with different insurers, the gap tends to appear exactly when it is needed.
We can advise technical and engineering consultancies on professional indemnity, product liability and the efficacy exposure that arises when advice is embedded in something physical.
Common claims and risk exposures
The exposures that produce claims in this trade, rather than a generic list.
Specification that fails in service
A material, machine or process specified for a duty it cannot meet. The loss is not the advice but the plant that now has to be modified or replaced, and the production lost while that happens.
Product recall and contamination
Where advice on a process or formulation leads to product that has to be withdrawn. The recall cost, the destroyed stock and the customer's lost sales all follow, and this is not a normal professional indemnity claim.
Injury arising from advised work
An operator hurt by plant that ran as the consultant advised, or by a procedure the consultant wrote. The claim is a liability claim as well as a professional one, and the two policies need to meet cleanly.
Commissioning and testing
Being present while plant is started, tested or handed over puts the consultant physically among live equipment, which creates public liability exposure alongside the advisory one.
Efficacy and performance
A process that works but does not achieve the throughput, yield or efficiency advised. The client's loss is the shortfall, and whether the advice promised a level of performance decides whether it is insurable at all.
The cover we arrange
We arrange professional indemnity and related insurance around the services you provide, the clients you work with and the contractual requirements you face. The appropriate cover and limits will depend on your individual activities and the terms available from insurers.
Professional indemnity
Claims arising from negligent technical advice, specification and design. The starting point, though rarely sufficient on its own in this class.
- Negligent specification and advice
- Process and material selection
- Claims made basis
- Defence costs included
Product liability
Injury or damage caused by goods supplied, including equipment specified, assembled or supplied by the consultancy. Occurrence based rather than claims made, which is a different trigger from the indemnity policy.
- Goods supplied or specified
- Injury and property damage
- Occurrence based trigger
- Best placed with the liability cover
Public and employers' liability
Injury and damage arising during site attendance, commissioning and testing, and cover for employees who spend working time in industrial environments.
- Site attendance and commissioning
- Damage to client plant
- Employers' liability, legally required
- Limits commonly £5m or £10m
Product recall and efficacy
Cover for the cost of withdrawing affected product, and for financial loss where a process does not perform. Both are specialist extensions rather than standard features.
- Recall and withdrawal costs
- Destroyed and reworked stock
- Efficacy where available
- Specifically arranged, not assumed
Run off
Continuing cover after the practice ceases. Plant advised on stays in service for decades, and a failure twenty years later still points back at the specification.
- Continues after the practice ceases
- Plant outlives the consultancy
- Six years or longer
- Arranged before closure
What an underwriter will ask
Having these to hand shortens the process considerably, and usually improves the terms.
- Sectors advised: food, pharmaceutical, chemical, manufacturing, energy, water
- Whether equipment is specified only, or also supplied, assembled or installed
- Whether commissioning, testing or operator training is carried out
- The largest plant or project value advised on
- Whether any advice affects product that reaches consumers
- Whether performance, yield or throughput figures are given in writing
- Export exposure, particularly to the United States and Canada
- Claims and notified circumstances over the last six years
What affects the cost of your insurance?
The main factors insurers consider when assessing the premium.
Sector and consequence
Food, pharmaceutical and chemical work is rated well above general manufacturing, because contamination reaches consumers and recall costs are open ended.
Whether goods are supplied
A consultancy that only advises is rated as a professional risk. One that supplies or assembles equipment is rated as a product risk as well, which is a materially different exposure.
Performance commitments
Written guarantees of output or efficiency are the clearest route to an uninsured loss, and their absence is worth demonstrating at presentation.
Export markets
North American exposure changes both price and availability, because the claims environment and the damages awarded are not comparable to the position here.
Conditions and exclusions to consider
Terms vary between insurers, so treat these as the questions to ask rather than a description of any one policy.
Fitness for purpose and performance guarantees
Promising a throughput, a yield or an efficiency is an obligation beyond reasonable skill and care. It is a common uninsured commitment in technical consultancy, and it usually appears in a proposal rather than a contract.
Recall costs without a specific extension
Standard liability cover answers injury and damage, not the cost of withdrawing product. Where advice touches anything consumed or worn, recall needs arranging deliberately.
The client's own operating decisions
Plant run outside the advised parameters, or maintenance not carried out, breaks the chain between the advice and the loss. It is the most frequently successful defence in this class, and it depends on written operating advice.
United States and Canada jurisdiction
Frequently excluded or separately rated. Where advice affects product exported there, it needs disclosing rather than assuming the existing cover travels.
Common questions
Do we need product liability as well as professional indemnity?
If you specify, supply, assemble or commission anything physical, yes. Professional indemnity answers the advice and product liability answers harm caused by the goods, and a claim about equipment you specified can be argued either way. Keeping both with a broker who can see the whole picture avoids the gap between them.
Our advice was right but the client ran the plant differently.
That is the strongest defence available in this class, and it depends entirely on what you put in writing. Operating parameters, maintenance requirements and limitations recorded at handover are what turn that argument into a documented one.
Is recall covered?
Not usually as standard. Liability cover responds to injury and damage, while withdrawing product from the market is a separate cost that needs a recall extension. Anyone advising on food, drink, cosmetics or pharmaceutical processes should treat it as a live question rather than an optional one.
We quoted an expected efficiency in our proposal. Is that a guarantee?
It can be read as one, which is the problem. Figures presented as expectations, with the assumptions behind them, sit on the insurable side. Figures presented flatly, particularly in a document the client relies on commercially, start to look like a warranty, and the policy will not answer it.
How do I get a quote from True Risk Solutions?
Call 01304 262880 and speak to a broker, or email info@truerisksolutions.co.uk with what you do, what you need cover for and a phone number with the best time to call, and a broker will call you back. We need a phone number to quote, because the cover and the price depend on questions that are quicker to answer on a call than by email.
Speak to a specialist who understands your industry
Tell us about your business and the work you undertake, and we will come back to you with cover options built around it. Call 01304 262880, or email us with a phone number and the best time to call and a broker will ring you back.