Duncan Collins

About Duncan Collins

Duncan Collins is the founder of runagood.com ltd the first fully online business consultancy whose mission is to demolish costs and accelerate results using automated diagnostic, planning and performance improvement tools. Delivered by home based Expert Guides these teach owner-managers how to:
• Find more customers
• Increase repeat sales
• Make more money
• Work more efficiently
• Raise productivity
• Exit with increased wealth
• Improve personal effectiveness

Who does PI Insurance protect?

PI cover is bad for the client – something that only the insurance industry and lawyers understand (and me). Here’s how it actually works in practice:

1. Client insists on consultant paying for PI cover as a condition of engagement
2. Client becomes unhappy with consultant’s work and complains
3. Consultant endeavours to correct it but client remains unhappy
4. Client claims on consultant for return of fees or compensation for loss or damage to his business
5. Consultant rejects claim
6. Client’s lawyer threatens consultant with legal action to obtain repayment or compensation
7. Consultant passes claim to his PI insurer without comment to client (those are the rules)
8. Insurer passes it to his lawyer
9. Lawyer scrutinises the small print and either advises insurer that:
a) The specific claim topic isn’t covered and the consultant is on his own
b) The claim has less than 50% chance of succeeding in court and should be repudiated
c) The claim may succeed but should be rejected all the way to court as a matter of policy
d) (Admissions of liability are unknown)
10. Insurer advises consultant that either:
a) He is on his own but the lawyer will advise him on how to word the rejection letter to the client and how to answer any that come back to minimise the chances of any pay-out by the consultant and the good chance that after a while the client will get fed up
b) Stop all communication with the client and the lawyer will now fight the client – to the death
11. The client is now obliged in either event to spend a lot of money pursuing the claim either against the consultant who is receiving clever professional advice or directly against skilled lawyers who are probably better than his

So PI cover is bad for the client but very helpful to the consultant who keeps his nerve!

Clients should insist on consultants being self insured – they’d be much better off and the consultant would have to take good care

So strike a blow against pointless premium costs for the insurance industry and lawyers and advise against PI cover!