Consultants

What Insurance Do Consultants Need?

Consultants need a wide range of insurances to cover the primary concerns associated with the consulting industry.

Commercial Property

Protecting Your Property and Your Income Source:

Commercial Property Insurance is a policy designed to insure against the unknowns in life. Many consultants are on the road, but most have a physical office where important business equipment is housed. The loss of business property can bring the business screeching to a halt. Commercial Property Insurance is designed to insure against these impossible-to-predict scenarios.

You’ll Need This When…

You begin operating out of a physical location, or purchase property that is essential to your business.

For Example…

If a fire rips through your office, it could result in the loss of important computer equipment and on-site data servers. The loss of this property could mean a huge interruption for your business. Business Property Insurance will cover the cost of this property.

General Liability

Covering Your On-Premises Concerns:

The most common type of insurance for businesses, a General Liability Insurance policy insures your business against two important concerns:

• Personal injuries of customers on your property
  
• Property damage to someone else’s property

You’ll Need This When…

You open a physical location for your business. Those who see clients regularly on site will need this insurance policy. Even consultants who operate remotely and never have clients physically in their businesses should strongly consider this policy.

For Example…

If a client slips and falls on a wet bathroom floor while on your premises, you will be held responsible. A General Liability Insurance policy will cover your legal defense and even potential damage payouts.

Business Owners Policy

Insurance For Multiple Needs:

Business Owners Policy insurance, also known as BOP, is designed for businesses with multiple insurance needs. A BOP works as a packaged insurance policy, combining the features of a General Liability Insurance policy and a Commercial Property Insurance policy.

General Liability insures against:

• Personal injuries
  
• Property damage

Property Insurance insures against:

• Damaged or stolen business property
• Property loss due to fires and natural disasters
• Loss of income as a result of lost or stolen property

You’ll Need This When…

Your business needs to purchase both a General Liability Insurance policy and a Property Insurance policy. As not all consultants will need to purchase both, this policy is a good option for those that do have this need.

For Example…

Computer equipment lost in a break-in may be covered under the Commercial Property Insurance aspect of a BOP. Meanwhile, a claim from a client who trips and is injured from an exposed cord would be covered by a General Liability policy.

Workers Compensation

Insurance for Injured Employees:

Workers Compensation is designed to help provide income replacement for employees injured on the job. While the risk of a workplace injury for consultants and their employees is low, there’s an array of issues that could affect office workers. In most states, you may be required to purchase a limited amount of Workers Compensation once your employment level exceeds two or more workers.

You’ll Need This When…

You begin hiring employees. Regardless of what type of employees you hire, most states will require you to purchase this insurance. This covers workers who are part-time. Even if your state does not require this policy, you should consider purchasing it. An injured employee may sue your business after a workplace injury if there is no Workers Compensation policy in place. Your business would be required to pay the employee for lost wages if the claim is successful. Instead, a Workers Compensation policy will always cover that worker’s injury claim.

For Example…

If an office assistant suffers a back injury while lifting a heavy box, he may file a Workers Compensation claim. As long as the task was work-related, a Workers Compensation policy will have you covered.

Errors & Omissions

Insuring Against Mistakes:

One major concern for consultants is providing advice that simply does not work out. In some cases, the advice you give may have been delivered incorrectly, misunderstood or, in rare cases, may have been misleading. An Errors & Omissions Insurance policy will cover claims for when your advice is to be the source of problems for your clients.

You’ll Need This When…

You first open your business. You can never predict when you may accidentally give faulty information or leave out important information when consulting a client. It is best to protect your business and reputation from the very first day.

For Example…

If you fail to mention an important regulatory roadblock while consulting a client, that client may land in legal trouble down the road. That client may then sue your business for damages. An Errors & Omissions policy will cover legal costs and may cover potential damage payouts.

Commercial Auto Insurance

Insuring Your Business Vehicles:

Business travel is extremely common for consultants. While much of that travel may be by airplane, many consultants do a fair amount of local travel by car. If your business owns vehicles for this purpose, a Commercial Auto Insurance policy is what you’ll need. Alternatively, if you use your private vehicle primarily for business travel, you may want to consider categorizing it as business property and obtaining a Commercial Auto Insurance policy for it.

You’ll Need This When…

You begin using a vehicle, whether personal or business-owned, mostly for business purposes. This is also important if you have employees who also use the same vehicle(s) for business purposes.

For Example…

If an employee gets in an accident while using a business vehicle, a Commercial Auto Insurance policy will cover any resulting claims. A Personal Auto Insurance policy will not cover this claim.