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Businesses often seek the advice of a management consultant for many different reasons. Maybe they want to change their processes and become more efficient, or perhaps they’re having some issues and need an outside perspective in order to fix them. Sometimes they may simply need advice on how to get started managing their employees, especially if they are a new business. They could require assistance with marketing or financial resources as well. Whatever the reason, you can be the solution they’re looking for.
The term management consultant can encompass many different professions and a lot of different scenarios. In reality, a business can have several different management consultant needs and may even need to hire different consultants for each. This list is just a comprehensive list of the different types of consulting services there are, which all fall under the blanket term of management consultant when it comes to insurance purposes.
General – A general management consultant is going to be able to offer the business a high-level overview of processes and procedures of the operation. Usually, the goal of a general management consultant is going to be to increase profits through identifying areas of improvement for efficiency. They may develop a strategy for getting a business where it would like to be profit wise, management wise, or even simply making their employees happier. After all, happy employees become more productive employees which can, in turn, generate some more revenue for the business.
Financial – Sometimes it can be more cost effective for a business to hire a financial management consultant to either help manage their books, like a bookkeeper or accountant, or an outside CFO. With the freelance gig economy booming it can help a business because they don’t have to pay for benefits, office space, and other necessary expenses that come with hiring an employee. A financial consultant can also be nice because it is fresh eyes looking at the finances of the business, rather than someone who may be looking it daily and not seeing the big picture.
Human Resources – A human resources consultant can be a great option for a business who does not have a human resources department. Due to all the laws and regulations surrounding employment, it is critical that all businesses seek the advice of someone experienced in the field. A human resources consultant is a great option since they are constantly learning about updated laws and can point the business in the right direction. Even if a business simply needs help creating and implementing a handbook, a human resources consultant is a great option.
Employment Practices – Speaking of employment law, an employment practices management consultant can be another great asset to business owners. Employment practices consultants are experts in all thing’s employment related such as discrimination issues, sexual harassment, wage issues, hiring and firing issues, etc. If a business has a question about a procedure or possible incident, an employment practices consultant is a great place to start.
Marketing – A booming management consultant subsection is marketing. With social media and Google taking over how businesses advertise and obtain clients through organic marketing, SEO experts are a must. Marketing consultants are huge because they are able to provide the expertise needed to take a business to the next level. Marketing consultants tend to become experts in one are like SEO, content creation, website content, social media, ad generation, or even blog writing. All of these areas take a lot of time to do properly, so a marketing consultant is a great investment for many businesses looking to grow. Often, a business may start here when outsourcing to a management consultant because if the clients aren’t coming in then no money is being generated, and that is the ultimate goal of any business after all.
Every industry should have insurance because there are risks and a management consultant is no different. You are most likely traveling to and from client offices and interacting with many people every day. You may have employees, own property that is for business use, and probably use the internet for a lot of your work. Most importantly, as a consultant, you are offering advice and if that advice turns out to be bad or you omit something and it ends up causing a financial loss to your client, there could be dire consequences for you.
Probably the most important insurance policy a management consultant should have is Professional Liability, also known as Errors & Omissions or E&O. This is especially true if you focus on human resources, marketing, or finance as these often have the largest room for error. As a professional offering advice, you have a little bit more of a risk of a lawsuit than businesses who are not working in a professional capacity. You probably do your best to never make a mistake and always do what is best for your clients. Unfortunately, this does not mean that you will encounter an unhappy client that claims you were negligent and made a mistake which causes them a huge financial loss.
If you do find yourself in the middle of a lawsuit that is alleging that a customer of yours suffered a financial hardship due to services you provided and you do not have Professional Liability insurance, you may be forced to file bankruptcy. Professional Liability insurance is so critical for a management consultant in any capacity. Not only will this essential insurance protection provide coverage if you have to pay a judgement or settlement, but it will also pay for the defense costs. If you have not had to pay an attorney lately, you may not be aware of how damaging their costs can be. On top of that there will be court costs as well. The defense costs will be paid regardless of whether you were negligent or not.
While Professional Liability or E&O is arguable the most critical of all the insurance policies available to management consultants, there are many others that you should consider, and keep in mind this is not a full list.
General Liability – General Liability insurance will provide coverage for you against claims of third-party bodily injury or property damage. If you are at a customer’s office and run over their mailbox or damage their floor by dragging your supplies across it, these incidents would be covered if the customer files a claim against you. Also, if you have clients coming to you and they happen to become injured while on the premises, you can look for coverage for that on this policy as well.
Cyber Liability and/or Media Liability – Libel, plagiarism, and invasion of privacy are all scary things that can happen if you are doing any kind of marketing for your clients. Media Liability is an absolute must if you are engaging in this type of work. The good news is that this is often a coverage found on Cyber Liability, which you should have as well due to the rising amount of data breaches that happen on a daily basis. If you store any client information or files for your business on a computer, server, backup, anything really you should have Cyber Liability. It will even provide coverage for the dreaded ransomware where criminal hackers will encrypt your data and not give you the key to it until you pay them a hefty sum of money. Gone are the days of paying a hacker $500 to get your data back, because as time goes on, they only get smarter and demand more.
Commercial Auto – The minute you get in your vehicle and are driving to and from client sites and are generating an income, your auto is no longer able to be insured under a Personal Auto policy. You will need to invest in a Commercial Auto insurance policy to make sure you have Auto Liability coverage for those times when you are working. Plus, you can get liability coverage on here if you ever have to rent a vehicle in your business name. Management consultants often travel and this can be a real concern for many when they go to rent a car. This is helpful, too, to keep your Personal Auto policy premiums down if there is a claim, since it would go on your Commercial Auto policy instead.
Workers Compensation – As a consultant you may decide that you want to grow your business by hiring employees. The minute you do that you should have Workers Compensation insurance. If there is an unforeseen incident in which your employee is involved in a work-related injury or illness Workers Compensation will provide their lost wages and medical expenses. It also helps to reduce the chance that an employee will sue you for negligence involving their injury if they are able to pay their medical bills easily through this policy.
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