Are you currently working as a consultant? Or maybe you are thinking about taking the leap from a regular 9 to 5 job to becoming self-employed? According to the US Bureau of Labor Statistics, as of May 2022, the number of self-employed people in the US is now at over 10 million. This number is expected to grow as we head into 2023.
As a self-employed consultant, know that consultant insurance is necessary for anyone who owns a business. Ready to learn some tips so you can get the best small business insurance rates? Let’s get started.
In this article we’ll cover:
- Business insurance for self-employed consultants
- Types of business insurance for consultants
- Home-based businesses
- Tips on getting consultant business insurance
According to Indeed, self-employed workers can choose from a variety of business structures, including a partnership, sole proprietorship, corporation, S corporation, and limited liability company (LLC). Some business structures are easier to set up than others, making it necessary for you to learn more about business structures if you have not done so already.
Popular self-employed consultant types:
There are many benefits that come with choosing to be self-employed consultant. Some of the top benefits include job flexibility, determining your own work environment, creating your own work schedule, networking with a variety of people, and of course, being your own boss. There are also many obligations that come with self-employment, like choosing the right type of insurance coverage.
Business insurance for self-employed consultants
When you are self-employed, you need business insurance to protect you and your consulting business. Life is full of unforeseen surprises. The last thing you want is for something to happen that causes your business to suffer financial harm. If you are just starting out and need to learn the basics of insurance, check out the ultimate guide to self-employed business insurance. This will help you learn what business insurance is and why you actually need it.
Types of insurance for consultants
There are many different types of insurance consultants can choose from to fully protect themselves and their operation. What type of insurance should you choose? Well, it depends! Every business comes with its own unique risks, and because of that, policy recommendations may vary,.
In need of a free consultant insurance consultation? Contact us now.
Consultant general liability
A general liability insurance policy is a broad policy that covers many of the miscellaneous things that can go wrong when operating a business. Specific coverages include property damage, third-party bodily injury, and personal and advertising injuries – which refers to libel, slander, and copyright infringement.
Lean more about consultant general liability.
Professional liability for consultants
Also known as errors and omissions insurance, a professional liability policy helps cover your expenses if you face a lawsuit regarding professional mistakes or claims that you were somehow negligent when offering your goods and/or services. In the event you’re in this situation, this policy will cover legal fees and miscellaneous court costs.
Learn more about consultant professional liability.
Consultant cyber liability
Many small business owners wonder – do I really need cyber insurance? The answer is… yes! Surprisingly, data breaches are more common than you’d think. And, once they happen, the majority or small businesses are unable to fully restore the data following a breach. Coverage highlights include customer notification, investigation, identity theft, credit monitoring, and more. The cost of a cyber policy is more than worth it, compared to the expenses that would pile up following an incident.
Learn more about consultant cyber insurance.
Business property insurance for consultants
Property insurance covers your business goods, which includes everything that has to do with running your business – equipment, inventory, the building itself, and more. Specific coverage includes replacing or repairing damaged property due to a covered event, like fires, tornadoes, plumbing pipes bursting, and even vandalism.
Consultant business auto insurance
A business auto insurance policy helps cover expenses if you happen to get into an accident while using your work vehicle for business related purposes. If your company owns a vehicle, odds are you can’t rely on your personal auto policy to cover it. That’s why this policy is more than essential.
Consultant workers’ comp
Think you can only benefit from workers’ comp insurance if you have one or more employees? Think again. While workers’ compensation insurance is mandatory in most states if you have employees, you can purchase a workers’ comp policy to cover your medical expenses and lost wages if you happen to get sick or injured on the job.
Learn more about consultant workers’ compensation.
Umbrella insurance for consultants
Forbes advises protecting your business with insurance so you do not experience financial disaster due to something unforeseen, like accidents, damages, or lawsuits. Umbrella insurance is a great option for adding additional coverage on top of existing insurance policies. Umbrella coverage helps prevent the need for you to pay anything out-of-pocket.
Home-based consultant business
Have a home-based business and wondering if you still need business insurance? Even if you have homeowners insurance, you still need to get business insurance coverage when you are working from home. While 48% of home-based business rely on their homeowners insurance to protect their work gear, what they may not know is that those policies typically only cover up to $500 in work gear.
Tips on getting consultant business insurance
As someone who is self-employed, you need to make sure your business has sufficient protection. The last thing you want is for unexpected costs to cause you (and your business) financial harm. These tips will help you make the right insurance decisions so your business is covered in case something were to happen. Keep in mind, without insurance, you would have to pay for accidents, damages, and expenses out-of-pocket.
Tip #1. Understand how each type of insurance works
You need to understand your specific industry’s risks so you can select the best types of insurance coverage to properly protect your small business. For example, what kind of accidents, natural disasters, or lawsuits could potentially damage your business? The higher your industry’s risks, the more you may expect to pay in insurance premiums. If you find that you need multiple insurance policies, you can typically package a few policies into one convenient small business insurance plan, which can be cost-effective.
Tip #2. Consider what insurance may be required of you
Did you know that in some states you are legally required to buy certain types of small business insurance? This makes it necessary for you to check with your state to learn about any legally required insurances you must have to properly cover your small business. Even if you’re not required by the state, your hiring party may mandate you carry particular coverages before you begin working for them.
Tip #3. Prioritize coverage over cost
As someone who is self-employed, you may be operating on a budget. While it may be tempting for you to choose the lowest premium, it is more important for you to pay a little bit more to get the right amount of coverage. A limited coverage insurance policy may not sufficiently cover your damages, making it so you are out-of-pocket if you do not prioritize your insurance coverage over your premium cost. Still… cost is definitely a factor, so learn how to save money on consultant insurance.
Tip #4. Think about your deductibles
The majority of small business insurance policies require you to pay a deductible before your actual insurance takes over. While you may be tempted to choose a high deductible because this results in lower payments, you must make sure that you have enough money available to pay the deductible if something were to happen and you need to file a claim.
Tip #5. Overestimate your insurance needs
If someone files a claim against your consulting business, it could lead to your going out of business if you do not have a sufficient amount of business insurance coverage. Even dismissed claims can require you to pay legal fees. To give you that extra peace of mind, consider purchasing more than the minimum amount of insurance coverage you need. This additional insurance protection helps ensure you do not have to pay out-of-pocket.
Tip #6. Read your business insurance policies thoroughly
Did you know that every insurance policy will differ from one insurance carrier to the next? Insurance carriers create their own policy that includes limits, premiums, deductibles, and exclusions. This means you need to understand what is covered under every policy, as well as what is excluded, before you make a final purchasing decision. Questions? No worries. Speak with an agent.
Tip #7. Work with top-rated insurance providers
As a consultant, you should only work with experienced insurance providers. The best small business insurance providers will not only customize plans to help protect your business, they are always available when you need help, have questions, or need to update your insurance package. Pogo works with top providers, offering our consultants the best coverage at the right price.
How much does consultant insurance cost?
The cost of self-employed business insurance varies based on several factors, including the type of work you do, the size of your business, number of employees, location, and more. And, of course, the premium amount will fluctuate per policy, because each insurance policy protects your business against a certain set of risks.
Get consultant insurance quotes
How much will your customized consultant business insurance policy cost? For you to find out, simply fill out this form to get an online insurance quote. We will compare quotes from 30 top insurance providers in order to find you the best premiums.