A Business and Management Consultant was engaged to provide the customer with general consultancy services, to improve the process of the business and increase efficiency.
At the end of the contract period, the customer refused to pay the full invoice. The customer felt that the project had not been completed and the results not delivered.
The Consultant’s customer wanted to pursue a claim for the extra costs that were incurred and a counter claim, should they decide to pursue them for the settlement of outstanding fees.
Fortunately, the Consultant had a Professional Indemnity insurance policy in place.
The PI insurers were able to review the contract and discovered that no clear objectives for the project had been set out. The insurers made the decision to pay the irrecoverable fees, to avoid a larger customer claim for professional negligence. The insured’s policy gave them the financial protection against the cost of this claim.