Do business consultants need insurance?
Insurance never hurts, especially when you’re a business consultant. There’s a lot of gray area when you’re in the consulting world. And with that, comes risk.
People depend on your professional opinion and expert advice. They rely on your guidelines to make important business decisions. Even if you’re the best business consultant money can buy, you’re not perfect. Projects go awry, clients get upset, and suddenly you could find yourself in a sticky situation.
Those offering professional services can always benefit from having the right kind of protection. There are various insurance policies that are a great fit for business consultants.
Insurance policies that are best for business consultants
Professional liability insurance is a no-brainer. You’re a professional who gives expert advice and opinions for a living. With that comes a lot of responsibility and expectation. Professional liability will protect you from the various mistakes that arise out of offering advice and services. A second key coverage for business consultants is general liability insurance, because you regularly interact with clients.
What is professional liability insurance?
Professional liability, or E&O insurance, protects you in the event that a client claims you were negligent, made a mistake, or failed to deliver goods or services. It doesn’t matter whether an incident was or was not your fault– you could potentially face a lawsuit from a disgruntled client either way.
Luckily, there’s professional liability to cover the damages. Policy benefits include:
- Failure to deliver promised services: You miss a very important deadline.
- Professional errors: You cause your client to lose money based on your poor recommendation.
- Negligent services: Your client doesn’t think your work meets industry standards.
- Court costs: Legal fees associated with lawsuits, like attorneys’ fees, judgements, and settlements.
Why is general liability insurance good for business consultants?
General liability policies protect you and your business from various risks. This coverage is especially important if you meet with clients in person.
General liability insurance protects you against:
- Personal/advertising injury: This includes claims involving slander, libel, false advertising, and copyright infringement.
- Bodily injury: If someone gets hurt on your property, or someone gets injured because of you or your employee (regardless of the location), this policy can pay the medical costs.
- Property damage: If you knock over and damage your client’s computer in the midst of explaining something with large hand gestures, your policy can handle the repair or replacement costs.
- Legal defenses: Court costs, lawyers’ fees, and other damages will be covered by general liability insurance.
Additional insurance recommendations for business consultants
- Cyber liability: This policy is important whenever you handle client information, as it provides coverage in the event of a cyber threat. It’ll cover things like customer notification, credit monitoring, forensics investigation, and legal costs in the event of a breach.
- Business property: As a business consultant, you rely on equipment such as computers, laptops, tablets, smartphones, and more. This policy protects your commercial property in the event that it gets damaged. Note: If you work from home, or keep your work gear stowed at home, don’t rely solely on your homeowners’ policy to protect your items. Typically, that policy will only cover up to $500 in business property damage.
- Inland marine: If you take your work gear outside of your business premises (more than 500 feet away), your business property insurance ends. Inland marine insurance will cover your commercial property if you tend to take them off-site.
- Business auto: This policy will protect vehicles owned by your business.
- Hired & non-owned auto: This protects your company against accidents involving vehicles you hire, rent, or borrow on behalf of your business. It also covers your company against employee accidents while using their personal vehicle in a work-related manner.
Interested in more coverage for less?
Many consultants opt for a business owner’s policy, or BOP. This coverage combines both general liability and business property insurance into a nice little package deal. The great thing about BOPs is that the price is less expensive than purchasing the policies on their own.
Another nice thing about BOPs is that you can usually tack on additional coverages and enhancements to the package.