Insurance for Consultants

Top 3 Recommended Policies

General Liability Insurance

Property Insurance

Worker's Compensation

1. General Liability Insurance

General liability insurance is a must-have policy for every business. This policy covers all the risks involved in running a business, including customer injury, advertising injury, or customer property damage. It protects businesses from exponentially expensive lawsuits and helps them land contracts and leases.

General liability insurance will safeguard you against all the common business risks. For instance, if one of your clients visits you and gets hurt, or their property gets damaged on your site, they can sue you. Therefore, a general liability policy will cover their medical bills, repairs or replacement costs for property damage, and legal and settlement costs.

A general liability insurance policy is important for consultants as clients often sue them for advertising damage. You also need a general liability insurance policy to rent an office or sign a commercial lease, as most property owners require this.

2. Business Owners’ Policy

Business owners’ policy (BOP) combines commercial property insurance with general liability insurance. It protects consultants from common business risks, such as customer injuries, lawsuits filed by injured customers or those who have sustained property damage, and lawsuits filed due to slander, defamation, or advertising injuries.

However, not all consultants qualify for a business owners’ policy (BOP). This type of policy is only offered to businesses operating in a low-risk industry, making less than $1 million annually, having a small workplace or office, having less than 100 employees, and requiring less than a year of business interruption insurance. So if you are a consultant thinking of getting a BOP, talk to an insurance provider to see if you qualify.

Consultants can customize their BOPs by working with their insurance provider to tailor a policy that works for them. You may want to include a business interruption insurance policy to cover the income lost and operating expenses incurred if there is a temporary halt in your services, such as due to a lawsuit. 

3. Professional Liability Insurance

Professional liability insurance, also known as errors and omissions insurance, offers protection to businesses for lawsuits filed by clients due to unsatisfactory work. It protects you against dissatisfied clients who may accuse you of not living up to their expectations or offering incomplete or unsatisfactory work.

 Consultation businesses are at greater risk of being sued by their clients for mistakes, negligence, or oversight. Some common mistakes that can result in lawsuits for consultants include overspending, wrong advice, negligence, missed deadlines, and undelivered services.

 Lawsuits for consultants can be really expensive, as well. If a client complains that their marketing campaign failed due to your advice, they can file a lawsuit against you.

In such cases, your professional liability insurance offers you coverage for anything related to professional mistakes, failure to deliver the promised results, and negligent services. This type of insurance is especially needed in a business such as consulting, as clients are often finicky about their requirements.

4. Workers’ Compensation Insurance

Workers' compensation insurance is specially designed for all the employees of a business. It offers coverage for any medical costs and lost wages that may come up due to a work-related illness or injury. Nearly every state in the U.S. requires businesses to have a workers' compensation insurance policy to protect their employees. 

For instance, if an employee at your consulting firm trips over computer cords and injures themselves, they may have to rest at home for a few weeks until they are fully recovered. This can lead to seriously expensive medical bills for your business and also cause them to take time off from work. As a result, they will be losing their wages until they are well enough to get back to work.

Workers' compensation insurance not only covers the medical expenses of your employees but also offers coverage for the wages lost while they are unable to work. It also covers any of the rehabilitation, ambulance, and surgery expenses involved. Moreover, if the employee decides to file a claim against you for not preventing the injury, this policy will cover your legal and settlement costs.

5. Cyber Liability Insurance

Cyber liability insurance protects you against data breaches and cyber crimes. Such crimes are very common today and happen very easily. However, responding to cyber crimes and restoring your business services can be very expensive. Not only will it cost you thousands of dollars, but it will also hurt your reputation as a consultant. 

Consultants handle the sensitive data of hundreds of clients. Especially those in the IT industry should have this policy to protect themselves in case of data breaches. Let's say you are hired to analyze sensitive data for a client, and your firm faces a data breach. In this case, your client can sue you for not protecting their data properly. 

This is where your cyber liability insurance will come in to protect you against lawsuits and help you recover quickly. It will also offer compensation for lost income due to halted business operations. 

Get started today!

Now that you know what insurance is needed for consultants go ahead and reach out to Elemental Risk Management to get a tailored policy made for your consulting business. Every business has unique needs, and talking to your insurance provider can help you find an affordable risk mitigation solution that is all-inclusive and tailored. 

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