Protecting Your Business from Professional Negligence
Professional negligence can occur when a professional such as a financial advisor, lawyer, or accountant, fails to meet the standards of care expected of their profession, resulting in financial loss or other damages to their client. This can be a serious issue for businesses, leading to significant financial losses, reputational damage, and even legal action.
In this blog, we explain what professional negligence is and explore the steps you can take to protect your business.
What is Professional Negligence?
Professional negligence is a type of civil wrongdoing that occurs when a professional fails to provide services in accordance with the established standards of their profession. This can include:
- A surveyor over valuing a property resulting in a client overspending when purchasing a property
- An accountant wrongly calculating a tax bill resulting in penalties and interest payments
- A conveyancer failing to warn a prospective purchaser of a right of way across a property they intend to buy
- A solicitor not drafting a Will in time resulting in a loss to a potential beneficiary
- An insurance broker under insuring a client
- An architect providing defective plans
How Can Professional Negligence Impact Your Business?
Professional negligence can have a number of negative consequences for businesses. Financial losses stemming from professional negligence can severely impact a business, ranging from lost profits to depreciated investments and damaged property. These losses not only affect immediate revenue streams but also undermine long-term financial stability and growth prospects.
Reputational damage is another significant concern, as the business's standing in the public eye can suffer if news of professional negligence spreads. This can lead to diminished trust from customers, partners and investors, resulting in decreased market share and hindered business expansion. Additionally, legal costs incurred in defending against negligence claims can further strain the company's financial resources, diverting funds from essential operations and growth initiatives. Operational disruptions, such as project delays and missed opportunities add another layer of challenge, impacting productivity and competitiveness in the marketplace.
Addressing the multifaceted consequences of professional negligence requires proactive risk management and mitigation strategies to safeguard the business's financial health and reputation.
Steps to Protect Your Business from Professional Negligence
With that being said, there are a series of steps that your business can take to protect itself from professional negligence, including:
- Do your research: Before hiring a professional, be sure to do your research and choose someone who is qualified and reputable with a good track record.
- Get everything in writing: Make sure that all agreements are in writing, including the scope of services, fees, and deadlines.
- Communicate clearly: Communicate clearly with them about your expectations and needs.
- Monitor the professional's work: Monitor their work on a regular basis to ensure that they are meeting your expectations.
- Get professional advice: If you have any concerns about their work, seek professional advice from another lawyer or accountant.
Professional negligence can be a serious issue for businesses, but there are steps that you can take to protect yourself. By gaining an understanding of the potential impacts to your business and following the steps we’ve outlined, you can help to mitigate the risks of professional negligence and ensure that your business is protected.
If you are looking for an experienced and friendly local legal team ready to provide jargon free advice and support your business,
Get in touch with our litigation experts at Howard and Over today.
