Good risk management is important to the success and survival of any business.
Hopefully you read our first highly popular set of tips on this subject but if you didn't, the link is at the bottom of the page. But here is our second set of tips on basic risk management and avoiding a professional indemnity claim....
1. Understand the needs and requirements of your clients
This should include setting out precisely what work you are to carry out. If there are other professionals involved it is important to clarify how roles and responsibilities are divided up.
2. Contracts are key
Make sure that you have appropriate contractual arrangements in place. If necessary, seek independent legal guidance.
3. Avoid scope creep
If a piece of work/project you are engaged in is evolving (often referred to as scope creep) make sure that there are effective change controls in place.
4. Stick to what you know
Only provide services which fall within your scope of your expertise. Don't start straying into areas which should be the domain of other experts as it can easily lead to errors.
5. Manage expectations
If a piece of work/project is going to take longer or cost more than originally anticipated make sure that the client is aware of this and accepts the position.
6. Keep thorough records
Keep full records of key conversations, meetings and exchanges with clients and other interested parties. This is invaluable if there is ever a dispute. Many claims could be avoided if there was a complete paper trail.
7. Get the right insurance
Make sure that your professional indemnity policy is adequate for your needs. Is the policy limit sufficient for the size and value of contracts you are entering into? Are there territorial limits on the policy? Has the type of work you are carrying out been clearly explained to your insurers?
8. Don't let IT be your downfall
Have adequate systems and controls in place to protect the data you hold from both loss and theft. Specifically make sure that data you hold in relation to clients or projects is properly protected using passwords and encryption. As you will have heard in the press, cyber crime is escalating to unprecedented levels and it is important to make sure your risks are minimised.
9. Seek expert advice and guidance
Drawing upon our years of experience in dealing with professional firms, we can offer specific and tailored advice on any aspect of your risk management. Please call us on 0345 251 4000 or email support@professionalindemnity.co.uk.