Consulting and Service companies are retained for specialized knowledge and skills services they offer to customers in a global market where localized regulations, restrictions, policies and procedures in a particular field may differ from one place to another demanding consultants to continually upkeep their specialized training per region.
AN ACTUAL SCENARIO BELOW EMPHASIZES THE CLAIM EXPOSURE:
Insured is a Human Resources Consultant who is a specialist in employment regulations, policies and procedures for East-coast companies wins a contract for a company in a small Midwestern town.The state in which the company is located recently passed extremely strict legislation requiring the workplace posting of a five-step method of reporting and responding to employment discrimination to which management must closely adhere. The human resources consultant is not aware of the change and does not inform the company about the posting requirement.Shortly after the engagement of the human resources consultant is over, five employees sue the company for discrimination. They are demanding $100,000 each and have a very strong case as the five-step method was not followed. The company sues the human resources consultant for negligence.