Liable for your advice: what does the law say, how do you limit it and how do you insure it?

A management consultant or interim manager gives advice on which a client bases decisions. If that goes wrong because of an error, the client can claim damages. The law requires an adviser to take the care of a good service provider, not to guarantee the result.

If you work through a private limited company (bv), the company is liable. But the client can sometimes also sue the adviser who did the work personally. You limit the risk in your agreements and general terms, and you insure it. That insurance is not a legal requirement for a management consultant.

In this article

1. When are you liable for an error in your advice?
2. Who is liable: your company or you yourself?
3. How do you limit your liability?
4. When does a limit in your general terms apply?
5. When does a limit fall away after all?
6. Which insurance covers wrong advice?
7. What do you record to prevent or rebut a claim?

When are you liable for an error in your advice?

If you did not take the care that may be expected of a good service provider. In law, an advisory assignment is a contract for services, and article 7:401 says the service provider must take the care of a good service provider in his work (Civil Code Book 7).

So the law asks for care, not for a good outcome. Advice that turns out badly afterwards is not automatically an error. The Supreme Court sets the bar at what a reasonably competent and reasonably acting professional would do. That includes enabling the client to make a well-informed decision (Supreme Court 18 September 2015, ECLI:NL:HR:2015:2745, about a lawyer).

If you fall short, you must compensate the loss the client suffers as a result, unless the failure cannot be attributed to you (Civil Code article 6:74). A claim becomes time-barred five years after the client knows of the loss and the liable person, and in any case twenty years after the event (Civil Code article 3:310).

Who is liable: your company or you yourself?

Your company first. If the client concludes the assignment with your company, the company is its counterparty and liable for a failure. Also for errors by people the company brings in, such as staff or hired freelancers. Those count as its own conduct (Civil Code article 6:76).

If the client gave the assignment with a particular person in mind, that person must do the work himself. The company's liability remains in place (Civil Code article 7:404). In a consultancy of one or two people this is often the case: the client chooses you, not the firm.

In addition, the client can sometimes sue the adviser himself. In 2015 the Supreme Court ruled on a lawyer who did the work on an assignment given to a partnership. The client can sue him personally in tort (article 6:162 Civil Code). No serious personal blame is required for this. It concerns his liability as a professional, not as a director (ECLI:NL:HR:2015:2745).

That ruling concerns lawyers. Whether a court would decide the same for a management consultant depends on the case. So do not count on the company fully shielding you personally from your own professional errors. The company does protect you against other business debts. If you want to know when a company pays off for other reasons, read Converting a sole proprietorship into a bv: when does it pay off.

How do you limit your liability?

With an agreement in the assignment or in your general terms. Between businesses the law leaves a lot of room. You can limit liability by type, amount and duration. Type refers, for example, to the difference between direct and indirect loss. That is how the Proportionality Guide describes it for public contracts (Guide, rule 3.9 D).

An example of a limit, as an example and not as a standard: liability is limited to the fee for the assignment, or to the amount the insurer pays out in that case. Choose a limit that fits the risk of the assignment and your policy.

If you work for central government under the ARVODI-2025 terms, a fixed scale applies. Unless agreed otherwise, liability is limited to four times the contract value per event and six times per contract year, with a maximum of € 3,000,000 per event and € 5,000,000 per contract year (ARVODI-2025, article 19.2). For a contract of € 50,000 that is up to € 200,000 per event.

Also record what you will not do. An engagement letter with the goal, the agreed work, the information you rely on and who takes the decision makes clear later what care you had to take.

When does a limit in your general terms apply?

Only if the terms apply and you provided them in time. A clause in general terms can be annulled if you did not give the client a reasonable opportunity to read them (Civil Code article 6:233). You gave that opportunity if you handed them over before or when the assignment was agreed, for example as an attachment to the quote.

Digital is also allowed, if the client can save the terms. If the assignment is not concluded digitally, for example orally or on paper, the client must expressly agree to digital provision (article 6:234(2) and (3)). A link at the bottom of your email after the client has agreed is too late.

If the client refers to its own purchasing terms and you refer to yours, the terms referred to first apply. Unless the second reference expressly rejects the first (Civil Code article 6:225(3)). So with large clients, read the purchasing terms in the request.

Not every client can annul a clause. A legal entity that published its latest annual accounts, or a business with fifty or more people, cannot do so on these grounds (article 6:235). For a private client, a clause that releases you from a statutory obligation to pay damages is in fact presumed unreasonably onerous (article 6:237(f)).

Research into the browsing behaviour of 48,154 visitors to the websites of 90 software companies shows how rarely terms are read. Only one or two in every thousand shoppers opened the licence terms, and those who did read only a small part (Bakos, Marotta-Wurgler and Trossen, 2014). That concerned consumers, but the lesson is useful: also put the limit in the quote or engagement letter the client signs.

When does a limit fall away after all?

If relying on it would be unacceptable in the circumstances by standards of reasonableness and fairness (Civil Code article 6:248(2)). That also applies with large clients. What is unacceptable is decided by the court case by case.

Many terms deal with this themselves. Under ARVODI-2025 the limit falls away in cases including death or injury, intent or gross negligence of the service provider or its staff, infringement of intellectual property and breach of rules on personal data (ARVODI-2025, article 19.3).

In public contracts, liability without any limit is not proportionate, and neither is liability for an indefinite period (Proportionality Guide, rule 3.9 D). If you get such a requirement in a tender, ask a question about it.

Which insurance covers wrong advice?

Professional indemnity insurance. It only covers financial loss caused by professional errors, such as wrong advice. Business liability insurance usually covers damage to people or property, and therefore not the loss of a client who took a wrong decision based on your advice (Ondernemersplein, professional liability).

For a management consultant the insurance is not a legal requirement. Ondernemersplein lists the obligation for accountants, lawyers, architects, financial advisers and notaries, among others. But clients or agencies sometimes require you to be insured, and public bodies often ask for it before awarding a contract.

The amount insured and the conditions are in the policy. Compare them with your contracts. If you agree a limit higher than the amount insured, your company pays the difference itself. Under ARVODI-2025 you must be insured in an appropriate and customary way, provide a statement from the insurer on request, and include the premium in your price (article 25).

What do you record to prevent or rebut a claim?

Everything that shows you worked carefully and informed the client properly. The question after a claim is what a reasonably competent professional would have done, and whether the client could decide on an informed basis. You prove that with documents from the time, not with your memory.

• An engagement letter with the goal, the work, the assumptions and who decides.
• Your general terms attached to the quote, and the limit also in the text the client signs.
• Notes or emails in which you put risks and choices to the client.
• The data on which you based your advice, and who supplied them.
• A policy whose insured amount fits the limits in your contracts.

Keep this file at least as long as a claim may still arise. That is five years after the client knows of the loss and of you, and in any case twenty years after the event (article 3:310 Civil Code). If you work together with freelancers or other firms on one assignment, also agree between yourselves who is responsible for what.

Sources

• Dutch Civil Code Book 7, articles 400, 401 and 404, version in force from 1 July 2026. wetten.overheid.nl
• Dutch Civil Code Book 6, articles 74, 76, 162, 225, 231, 233 to 237 and 248, version in force from 16 July 2026. wetten.overheid.nl
• Dutch Civil Code Book 3, article 310. wetten.overheid.nl
• Supreme Court of the Netherlands, 18 September 2015, ECLI:NL:HR:2015:2745, grounds 3.4.1 to 3.4.4. uitspraken.rechtspraak.nl
• Proportionality Guide (Gids Proportionaliteit), 3rd revision, Government Gazette 2021, 41481, rule 3.9 D. officielebekendmakingen.nl
• Prime Minister, Decree adopting the ARVODI-2025 general government terms for services, 17 March 2025, Government Gazette 2025, 10990, articles 19 and 25. officielebekendmakingen.nl
• Ondernemersplein, Professional liability insurance (in Dutch), accessed 31 October 2026. ondernemersplein.overheid.nl
• Bakos, Y., Marotta-Wurgler, F. & Trossen, D. R. (2014). Does anyone read the fine print? Consumer attention to standard-form contracts. The Journal of Legal Studies, 43(1), 1-35. doi.org