HR consultants and employment-law advisers

Reviewed by Matthew Bartlett, Director · Last reviewed 2026-06-23

HR consulting and employment-law advisory is a high-volume, high-touch professional services category. UK employment law changes frequently and tribunal awards can be material even for small employers. This entry explains the PI position for UK HR consultants and employment-law advisers (other than practising solicitors, who are covered under the SRA Minimum Terms).

The exposure

Three distinguishing features for HR consulting PI:

1. Tribunal-driven claim values. A successful unfair-dismissal claim can produce awards in the tens of thousands; discrimination claims have uncapped awards. If the HR consultant's advice led to the dismissal or the alleged discriminatory practice, the consultant is exposed.
2. Multiple-employee exposure. A flawed policy designed by the consultant can affect every employee in the client's organisation. Aggregation clauses matter here — a single advisory error can produce many connected claims.
3. Regulatory currency. Employment law updates frequently (TUPE, gig-economy classification, IR35 reforms, statutory sick pay, flexible working). Advice given against last year's rules can be wrong this year.

Typical claim scenarios

• Dismissal-process advice. Consultant advises on dismissal of an employee; tribunal subsequently finds the dismissal unfair or discriminatory; client seeks recovery from consultant.
• Policy drafting. Consultant drafts an HR policy or employee handbook that proves to contain provisions in breach of statute. The flaw affects multiple employees.
• TUPE. Consultant advises on a TUPE transfer that is subsequently found defective, with each affected employee bringing claim.
• Discrimination risk assessment. Consultant fails to flag a discriminatory practice or pay arrangement; multiple employees subsequently bring claim.
• Settlement-agreement drafting. Consultant drafts settlement agreement that fails to extinguish a claim subsequently raised.
• IR35 / contractor classification. Consultant advises on contractor status; HMRC determination finds misclassification, with PAYE/NI consequences.

Who is allowed to do this work

HR consulting itself is unregulated. Anyone can provide HR consulting services. But specific elements require regulated authorisation:

• Drafting settlement agreements for the purpose of compromise contracts requires the adviser to be a "relevant independent adviser" — typically a solicitor, certified union rep, or CIPD-qualified person with specific authority
• Tribunal representation requires the representative to be the employee/employer or someone with permission to represent
• Specific employment-law advisory work crosses into reserved legal activities; the boundary is fact-specific

For a PI insurer, the distinction matters: standard "management consultant" wording may not extend to reserved legal activities. The schedule needs to reflect what the consultant actually does.

Typical PI structure

For a UK HR consultancy with £150k – £500k fees:

• Limit of indemnity £1m – £3m (driven by potential aggregated claim value across multiple employees)
• Defence costs in addition to the limit
• Subcontractor extension if associate consultants used
• Settlement agreement / advisory cover specifically named
• Regulatory investigation extension (HMRC, EHRC investigations) £100k+
• Worldwide jurisdiction excluding US/Canada

Annual premium typically £750 – £2,500 depending on size, claims history, and proportion of higher-risk work (TUPE, redundancy programmes, discrimination investigations).

What HR consultants should also carry

• Public liability — for any on-site visits to client premises (employee briefings, training delivery)
• Employer's liability — statutory if any employees
• Cyber liability — client HR data is highly sensitive personal data under GDPR
• Office contents and business interruption — to insure the practice

Renewal notes

For HR consulting renewals, the underwriter usually wants to know:

• Number of employee-level matters handled in the last 12 months
• Any tribunal representation undertaken
• Any settlement-agreement drafting
• Largest single engagement by fee
• Any claims or circumstances in the last six years
• Any current ACAS conciliations involving the consultant's advice

About Apex Insurance Brokers

Apex Insurance Brokers Limited arranges PI cover for UK HR consultants and employment-law advisers (other than practising solicitors). FCA firm reference number 724952. We discuss the scope of services, the contract framework, and the wording extensions that matter for high-volume HR advisory work.