PL Risk Blog

Liability Risks for Professional Service Businesses

Written by Mike Smith | May 9, 2017 7:16:34 PM

The quality of work that professional service businesses provide is the determining factor of their success. Therefore, simple yet common mistakes can compromise the quality of the work provided and cause miscommunication and similar liabilities. Avoiding these exposures takes some awareness and preparation, but it’s feasible. In addition to sharing the following information with your clients, ensure their Professional Service Liability Insurance risks are taken care of.
 

Client miscommunication.

Ineffective communication with clients is the leading factor that influences the success of a project, explains Affinity Live. While email is the preferred communication platform for the majority of professionals, it’s not necessarily the best option for each type of correspondence. Ideas, directions, and feedback can get lost in a web of emails, making it difficult to navigate among multiple parties. Team based communication is more likely to thrive during actual conversations and tracking exchanges with management software for reference purposes.
 

Foregoing project management.

Even for contracted workers who have a temporary timeline to abide by, management is still a must. Without it, projects can go over budget, take too long, and use up precious resources. Although professional services are usually short term and typically run between one and three months, a single failed project can lead to financial losses that can affect the company for an entire year.
 

Budgeting crises.

Without the proper time tracking procedures, budgeting can become a huge risk for professional service businesses. The estimated budget versus the actual budget doesn’t have to vary so greatly if your clients ensure they are tracking their time wisely and are realistic about gauging the scope of work needed to complete the project.
 

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