Best efforts or results · insured capacity · promises
Professional indemnity insurance (BAV) for a self-employed business adviser
A business consultant is rarely held liable for a calculation error. The dispute is almost always about whether you promised something that did not come true.
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Deze pagina in het Nederlands: Beroepsaansprakelijkheidsverzekering voor een zelfstandige bedrijfsadviseur.
The calculator and the quote form below are in Dutch. Prefer to do this in English? Email info@finassverzekert. nl or call 072 - 509 24 56 and we will take it from there.
Work out for yourself what it would cost.
Enter your details; you will receive a proposal within one working day.
- We compare the offerings of several insurers
- An adviser checks whether the cover suits your activities
- We arrange the switch, including cancellation
A premium indication, not personal advice. Prefer to talk it through? Call 072 - 509 24 56.
In brief
As a self-employed business consultant you deliver analyses, plans and choices. What goes wrong is therefore rarely visible: a growth plan resting on the wrong assumptions, reorganisation advice in which the chosen dismissal route turns out not to hold, a grant or innovation scheme you apply for too late, or advice on the legal form that produces an avoidable tax charge when the business is sold. The loss is then money, not injury or broken property. That is called pure financial loss and professional indemnity insurance exists for it. What such a policy covers in general terms is set out on the hub page on the BAV.
The standard is the duty of care in Article 7:401 of the Dutch Civil Code: did you act as a reasonably competent and reasonably acting professional would? Advisory work is an undertaking to use best efforts, not an obligation to achieve a result. Disappointing figures are therefore not in themselves a professional error. It becomes different as soon as your quotation, presentation or newsletter names an outcome: a percentage saving, a payback period, a grant said to be certain. Such a sentence is read afterwards as a guarantee, and liability under guarantees and promises going beyond liability in law is excluded on virtually every policy.
Also watch where your role ends. If you spend a period as interim director, sign contracts or are registered as a director, you no longer act solely as an adviser. Claims arising from that run through Article 2:9 of the Dutch Civil Code and belong on a directors' and officers' liability insurance. If you advise on financing, insurance or pensions, you touch on the licensed territory of the Wet op het financieel toezicht (the Dutch Financial Supervision Act); work without the required licence falls outside the cover.
This page deals with one situation. The full overview is on Compare professional indemnity insurance (BAV).
What to look out for
Four points that decide a claim for self-employed consultants more often than the size of the engagement.
Put in writing what you do not promise
Set out in the engagement letter which assumptions underlie a forecast, which data you received from the client and that you did not verify it independently. Without that record the discussion shifts to your word against the client's. An indication without a caveat is later called a undertaking, and it is precisely that basis which is excluded.
From advising to helping to run the business
An adviser who in fact determines policy can be held liable as a de facto director, even without registration in the commercial register. The BAV covers mistakes in your advice, not your conduct as a director. If you take on interim responsibility, declare it in advance, so that the role is expressly included or placed separately.
The business activity on the policy schedule
What is insured is the work stated on the policy schedule. If you expand into, for example, merger and acquisition support, valuations, grant advice or IT selection projects, that is often a different business activity. Insurers sometimes exclude transaction support and valuations expressly, or attach a separate condition to them. Ask about this before you accept such an engagement.
What the policy does not pay out
Not covered are: intent and wilful recklessness (Article 7:952 of the Dutch Civil Code), fines, penalty payments and punitive damages, and the putting right your own work including repayment of your fee. Also relevant are known circumstances: a current dispute you do not declare when you apply falls outside the cover and can affect the whole policy under Articles 7:928 and 7:930 of the Dutch Civil Code.
What does your premium depend on?
- Annual turnover from advisory work: the usual measure for a one-person consultancy
- Type of assignments: strategy and process support weigh differently from transaction and grant work
- Sum insured and excess: set per claim and per insurance year
- Your own general terms and conditions: a valid limitation of liability reduces the insurer's risk
- Retroactive and run-off periods: how many years back and how many years forward you want cover
- Area of cover: engagements for US or Canadian parties are often excluded
Insurers weigh these details differently. That is where your saving is.
What is covered
| Situation | AVB | BAV |
|---|---|---|
| The dismissal route you advised turns out not to hold and your client pays compensation after all | No | Yes |
| You apply for an innovation scheme too late, so your client misses out on a full year | No | Yes |
| Confidential figures belonging to your client end up with a competitor by email | No | Provided that |
| A participant trips over your bag during a workshop in a room you hired | Yes | No |
| You drop a projector off the meeting table at a client | Provided that | No |
| A growth plan does not come true because the market turns and turnover lags behind | No | No |
A disappointing outcome is not yet a mistake. Only when your assumptions were not traceable does cover come into play.
Frequently asked questions
This is what people ask us most.
Why is public and employers' liability insurance not enough?
An AVB covers injury and damage to property. Your risk is a client who says he lost money through your advice: a grant missed, a failed reorganisation, the wrong structure. Nothing is broken and nobody is injured, so the AVB does not pay. If you also work at clients' premises, you need both policies; see the public and employers' liability insurance.
What if the client will not accept my terms?
Large clients often declare their own purchasing conditions applicable, sometimes with unlimited liability or a penalty clause. Report that to your insurer. Liability accepted by contract that goes beyond what the law imposes on you is excluded as standard. It is better to negotiate a limit than to rely on terms you never sent.
I work through an agency or consultancy firm. Am I co-insured?
Not automatically. Some firms include hired-in self-employed professionals, while others require your own policy and evidence of insurance with the contract. Ask for the policy conditions and check the description of the insured capacity and whether the cover continues after your engagement ends. Your own policy is the only one you control.
What happens if I close my practice?
A BAV almost always works on a claims made basis: what matters is the moment the claim is brought and notified, not the moment of the advice. If you deregister or take up employment, claims about old engagements will still come in for years. Arrange run-off cover before you cancel, because buying it afterwards rarely works.
Read more
Within Beroepsaansprakelijkheidsverzekering
- Beroepsaansprakelijkheidsverzekeringthe main page
- Beroepsaansprakelijkheidsverzekering compliance adviesbureau
- Beroepsaansprakelijkheidsverzekering management consultant zzp
- Beroepsaansprakelijkheidsverzekering legal counsel zzp
- Beroepsaansprakelijkheidsverzekering bedrijfsadvies
- Beroepsaansprakelijkheidsverzekering compliance officer zzp
- Beroepsaansprakelijkheidsverzekering opleidingsadviseur zzp
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