The business world is full of consultants of all different shapes, sizes, and specialties who are total pros at what they do — just like you. But no matter how good you are at what you do, accidents happen.
And if your promised results don’t quite materialize, or your advice leads to a client losing money, your business can get slapped with some pretty nasty legal ramifications.
Fortunately, our independent insurance agents have been around the block a time or two and have plenty of experience in finding the right protection to defend your business from these liability risks.
But before we go and get you all suited up with the right coverage, let’s discuss the risks you face and what kind of protection you’ll need.
Consultant Roles and Risks
As a business or management consultant, you’re likely trying to find ways to help your clients reduce costs or improve efficiencies.
But while your services are meant to lead to improvements and increased profits for your clients, falling short on services or making even the smallest error can have negative consequences.
But with the right insurance plan in place, you can protect your business from lawsuits, property damage, accidents, theft, weather, and more. A comprehensive business consultant insurance plan is one of the best ways to protect your business.
And since your firm isn’t the same as the one down the street, your policies should be tailored specifically for your unique needs.
Basic Insurance for Business Consultants
Since business consultants rarely use heavy machinery in their line of work, there’s a relatively low risk of property and bodily injury losses.
But you still need to protect your business and your personal assets in case 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 you, this could mean:
- A client, vendor, or delivery person slips and falls on your business premises.
- You, or an employee, damages a client’s property.
- You are accused of false advertising, slander, or libel.
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 from a lawsuit, your general liability policy pays up to your policy limits.
Commercial property insurance protects your business property whether it’s a building you own or the contents inside of it (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 is extremely valuable and pays for on-going expenses (rent, salaries, etc.) if you’re unable to operate or are forced to temporarily relocate after a covered loss (e.g., a fire).
You may qualify for a business owners policy (BOP), which is a bundled 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 for your consulting business.
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 non-owned 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 maxed out, protecting you from claims that exceed the amount of coverage available from any other applicable policy.
Professional Liability Insurance for Business Consultants
Like we mentioned earlier, even the smallest mistake on your part can hurt your client’s profits and more. While your client can simply fire you and walk away, if they think the damage done deserves it, they could sue you for damages.
Even if you know it wasn’t your fault, you’ll still 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? Fortunately, there’s insurance for that.
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:
- Actual or alleged errors
- Professional negligence
- Breach of duty
- Misleading statements
- Claims resulting from the performance — or nonperformance — of professional services
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:
- An occurrence policy covers a business for harm to others caused by incidents that occurred while a policy is in force, no matter when the claim is filed. This means that even if the policy is no longer in force, it provides coverage for a claim that is made for an incident that occurred while the policy was in force.
- A claims-made professional liability policy covers the business for claims made when the policy is in force regardless of when the incident happens. This means that if a claim is made for an incident that occurred before the policy was in force, the policy may still provide coverage, depending on your policy terms. Special provisions apply to claims-made coverage.
It’s hard to know right off the bat what kinds of liability protection is right for you, so make sure you talk to your agent and they can help steer you in the right direction.
Other Coverage for Business Consultants
Your independent insurance agent can help you decide if you need additional business consultant insurance, such as the following:
- Workers compensation insurance
- Employment practices liability coverage
- Cyber liability insurance
- Commercial auto insurance, or hired or non-owned commercial liability coverage
Find Business Consultant Insurance Quotes Today
Whether you run a small independent one-man shop out of your attic or a larger consultant firm, there’s plenty of options out there to get you the coverage you need. When comparing quotes from multiple highly rated insurance companies, be sure you are using an apples-to-apples approach for evaluating the coverage.
One company may not offer the exact same coverage, limits, or exclusions as the next — so don’t decide based on cost alone. You may find the less expensive proposal offers lower limits or inferior coverage, leaving you with unwanted gaps.
A simple solution that will end up saving you loads of time in money is by going with an independent insurance agent from our network.
The Benefits of an Independent Insurance Agent
Independent insurance agents are kind of like the Google of insurance quotes. You tell them what you’re looking for, and they bring in the results. And since they aren’t tied down to one carrier, they’re free to shop around and bring multiple policy options to the table.
And it gets better, you don’t have to review the policy options alone. They’ll walk you through everything you need to know about finding the right coverage, and price, for you. But it doesn’t end with your signature.
Along the way, if something bad ever happens, they’ll handle the entire claim process for you and deal with the carrier, so you can focus on your consulting empire. How sweet is that?