Business or management consultants are entrusted to provide advice that can boost profits and restore a client’s image. But if your promised results do not materialize or you provide erroneous advice that has negative financial consequences for a client, your consulting business can face grave financial consequences as well.
You can protect your consulting business with the right insurance policies and the help of an independent insurance agent.
Business consultants provide advice and assistance to other businesses and organizations on issues such as the following:
Other consultants provide a full range of business services including these:
In your role as a business or management consultant, you are likely tasked with finding ways to help your clients reduce costs or improve efficiencies. While your services can lead to improvements and increased profits for your clients, failing to provide services or making errors of any kind can have negative consequences.
You need to have a plan in place to protect your business from risks such as lawsuits, property damage, accidents, theft, weather and other unforeseen events. A comprehensive business consultant insurance plan is one of the best ways to protect your business when things go wrong. And since your firm is not the same as the firm down the street, your policies should be tailored to your unique needs.
Business consultants have a relatively low risk for property and bodily injury losses. But you still need to protect your business and your personal assets in the event that someone is injured on your property or your business sustains physical damage or a property loss.
Commercial general liability (CGL) insurance offers broad coverage for lawsuits related to third-party bodily injury and property damage. For a business consultant, this might mean:
CGL insurance covers the cost of paying medical bills and replacing damaged property, as well as your legal defense if you are sued. If you are required to pay a settlement or judgment as a result of a lawsuit, your general liability policy pays up to the limits of your policy.
Commercial property insurance protects your business property whether it is a building that you own or the contents of your office space (computers, office furniture, supplies, etc.). If your business property is damaged by fire, weather, theft or vandalism, your business property policy pays to repair or replace it.
Your property policy should also include coverage for business interruption, or business income coverage. This valuable coverage pays for on-going expenses (rent, salaries, etc.) if you are unable to operate or must temporarily relocate after a covered loss (e.g., a fire).
You may qualify for a business owners policy (BOP), which is a convenient package policy designed for small- to medium-sized businesses. With a BOP, you can have liability, property and business interruption coverage in one affordable package customized or your business.
Talk to your independent insurance agent about whether you qualify for a BOP.
Commercial umbrella insurance provides excess liability protection to any of several other policies you might have, including commercial general liability, employer’s liability, and hired and nonowned auto liability. By purchasing one commercial umbrella policy, you essentially get higher limits on all of those policies rather than having to raise the limits on each policy individually. Commercial umbrella insurance starts paying benefits when the limits of your other applicable insurance policies have been exhausted, protecting you in the event that a claim exceeds the amount of coverage available from any other applicable policy.
Business consultants are hired to use their expertise to positively impact a client’s business. Any mistake that you make can have negative consequences for a client’s profitability. While your client can simply fire you and walk away, if the client perceives the damage done to be great enough, there is a good chance the client will sue you for damages.
If you were sued for professional negligence, would you be able to pay for all of the costs to defend yourself? Even if you know you have not been negligent, you will be faced with attorney fees, court costs, and perhaps even large settlements or court-ordered judgments. Where will you find the funds? Will you be able to continue to operate?
Business consultant professional liability insurance (or errors and omissions insurance) provides protection if a client sues you for negligence or other wrongdoing related to your work. Professional liability policies provide coverage for the following:
A professional liability policy covers defense costs, settlements and judgments. Insurance companies offer customized policies that address the specific needs of different types of professional services firms.
There are two types of professional liability policies:
Talk to your insurance agent about which type of professional liability policy is right for you.
Your independent insurance agent can help you decide if you need additional business consultant insurance, such as the following:
Whether you own an independent business consultancy or you own a larger firm, an independent Trusted Choice agent can get you fast quotes for tailored insurance coverage. Our independent agents are not locked in to working with one insurance company, and they know that a one-size-fits-all approach is never best. You need tailored coverage that addresses your unique business risks and a local agent who will get to know you and be your trusted adviser for the long term.
When comparing quotes from multiple highly rated insurance companies, be sure you are using an apples-to-apples approach for evaluating the coverage being offered. One company may not offer the exact same coverage, limits or exclusions as the next — so don’t make your decision based on cost alone. You may find the less expensive proposal offers lower limits or inferior coverage, leaving you with unwanted gaps. Your independent agent can help you evaluate any quotes that you receive so you can make the best choice for your needs and budget. Contact a local agent today.