Top Liability Risks for Professional Service Businesses
Professional service businesses rely on the quality of work they provide to their customers in order to thrive. Regardless of the service type, the people who provide the amenity are the backbone to the industry. Because poor project management can cause clients and revenue to be lost, it is important to acknowledge the popular mistakes that are commonly made and how to avoid them. While preparing a business for potential mishaps, be sure your clients’ Professional Liability Insurance Risks are managed.
Miscommunication with Clients- According to a recent study by Affinity Live, ineffective communication with clients is the leading factor that influences the success of a project. Although email is the preferred mode of communication among clients and professionals by a landslide, it is not always the best vehicle for communication among multiple parties. For example, ideas and directions can be lost in translation when attempting to convey them through a web of emails. Team based communication is more likely to thrive during actual conversations and tracking exchanges with management software for reference purposes.
Inaccurate Budgeting- The above mentioned study showed that only 30 percent of professionals use accurate time tracking software. The other 70 percent tracks their time manually, if at all. Naturally, this causes issues with seeing the budget impact and evaluating the existing versus the estimated budget. If too much time is spent on a project, or resources are low, the project manager needs to reevaluate the system to avoid losses in the future. Determining the overall profitability and the loss of a project is essential to any professional service business.
Assuming Management isn’t Required- Regardless of the length of the job, project management is always recommended. 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.
At PL Risk, we offer insurance solutions for a variety of professional service businesses. We understand the risks involved and strive to provide your clients with quality coverage to protect each component of their operation. For more information, contact our specialists today at (855) 403-5982.
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