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Priority 1 — Your responsibility & your defence
Professional liability & legal defence: who pays what ?
This is the most common confusion. Remember this: professional liability pays the compensation to your client if your responsibility is established. Legal defence pays the lawyer who defends you, whether you are right or wrong. Two distinct covers, essential together.
Understand
Professional liability: the heart of a consultant's risk
You don't sell a product, you sell expertise and decisions. If one of them turns out to be faulty and costs your client money, they can claim compensation from you. Professional liability covers these consequences: error, negligence, unsuitable advice, delay, defective deliverable, mishandled data. These amounts often far exceed your assignment fee.
Professional liability and general (operating) liability, not to be confused
General (operating) liability — RC exploitation in Belgium — covers extra-contractual damage: harm you cause to a third party outside the contract, for example material damage during an assignment. Professional liability covers faults linked to the performance of your assignment. For a consultant, the operating risk is limited, which is why general liability is most often included cheaply, or even free, within professional liability.
A concrete example
An IT consultant configures a data migration. A configuration error causes their client to lose orders for 48 hours. The lost revenue and remediation add up to tens of thousands of euros.
Here is what happens: legal defence appoints and pays the lawyer who will contest liability and negotiate. If the consultant's responsibility is ultimately established, it is professional liability that pays the compensation to the client. The lawyer on one side, the compensation on the other: without both covers, one of the two bills falls on you.
What is covered
The cover of a good consultant liability policy
Generally covered
- ✓ Professional error, negligence or omission
- ✓ Wrong advice or unsuitable recommendation
- ✓ Financial (non-material) loss of the client
- ✓ Delay or breach in performing an assignment
- ✓ Loss or damage of documents and data entrusted to you
- ✓ General liability, often included cheaply or free
Often excluded (to check)
- ✕ Intentional fault or wilful misconduct
- ✕ Fines and criminal penalties
- ✕ A mere dispute over the amount of your fees
- ✕ Activities not declared to the insurer
- ✕ Damage already known before taking out cover
- ✕ Certain cyber risks, to be covered separately
Cover and exclusions vary from one insurer to another and according to your activity. Our role: read the policy terms and spare you nasty surprises on the day of a claim.
The essential complement
Legal defence, or how to finance your defence
Legal defence, often called legal protection, takes charge of your defence when your responsibility is contested: file analysis, choice and fees of the lawyer, expert costs, procedural costs. It steps in even when you are right, because someone still has to prove it.
It works both ways. In defence, it protects you when a third party claims compensation from you. In recourse, it helps you claim compensation from a third party responsible for damage you have suffered. Combined with professional liability, it ensures that the bill for a dispute — often heavier than the dispute itself — does not fall on you.
✓
Costs covered
Lawyer, expert assessment and procedure, within the policy limits.
✓
Free choice of lawyer
Once proceedings begin, you choose your own lawyer. It is a right in Belgium.
✓
Advice upfront
Legal experts analyse the file and seek an amicable solution before any trial.
Our specialist insurers
For legal defence, we compare the specialists
Depending on your activity and profile, we approach the reference companies on the Belgian market :
ARAGDASEuromexCFDP
Legal VillageProvidisARCES
Frequently asked questions
Professional liability & legal defence
Is professional liability mandatory for a consultant ?
It is only legally mandatory for certain regulated professions. For a consultant, it is mainly clients who require it in engagement contracts. In practice, it is often what conditions the signature.
What is the difference between general (operating) and professional liability ?
General (operating) liability covers extra-contractual damage caused to a third party outside the contract (material damage during an assignment, for example). Professional liability covers faults linked to performing the assignment. For a consultant the operating risk is low, so general liability is often included cheaply, or even free, within professional liability.
Does liability insurance also pay for my lawyer ?
No. Professional liability pays the compensation owed to the third party if your responsibility is established. It is legal defence (often called legal protection) that pays the lawyer and procedural costs to defend you. The two are complementary and are taken out together.
Do I need professional liability if I work through a company (SRL/BV) ?
Yes. The company is answerable for its services, and the director's responsibility can also be sought. Professional liability protects the business; depending on your situation, it combines with directors' liability cover.
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