Consultants operate across every industry, providing their knowledge and experience to companies. This creates several insurance needs for those who have made consulting their life’s work. Consultants who offer the following services should consider insurance:
General Liability Insurance insures your business against personal injuries of customers on your property, and property damage.
Example… A client slips and falls on a wet floor while on your premises. A General Liability Insurance policy will cover your legal defense and even potential damage payouts.
Professional Liability Insurance (or E&O) protects consultants by covering legal fees if accused of giving incorrect or incomplete advice.
Example… You fail to mention an important regulatory roadblock while consulting a client, who lands in trouble with the local authority, who in turn, sues you. A Professional Liability policy covers your legal costs and payouts.
Workers Compensation provides income replacement for employees injured on the job. In most states, you may be required to purchase a limited amount of Workers Comp if you employ two or more workers.
Example… An office assistant suffers a back injury while lifting a heavy box. As long as the task was work-related, a Workers Compensation policy will cover their medical bills and lost wages.
Business Owners Policy (BOP) is a packaged policy, combining General Liability and Commercial Property insurance at a reduced rate.
Example… Computers are stolen during a break-in. The Commercial Property component of your BOP will cover their replacement. Meanwhile if a client trips and is injured from an exposed cord, they’d be covered by the General Liability component.
Cyber Liability Insurance protects you from data loss and theft. It covers the cost of lost digital assets, business interruption, cyber extortion and associated security costs.
Example… A disgruntled client breaks into your consultancy client's database, stealing all your client’s bank details. Cyber Liability insurance will cover the cost of their recovery and legal costs.
Umbrella Insurance provides additional coverage beyond the limits of liability policies. If a single serious incident or multiple claims overwhelm the limits of your policies, an umbrella policy will cover the rest.
Example... Your advice leads to substantial loss for your client. If your General Liability policy limits won’t cover the full amount, your umbrella polcy will cover the rest.
Commercial Auto Insurance is for consultants that drive often for work with a private vehicle primarily for business travel. You’ll be covered if involved in a road accident to or from a client visit.
Example… An employee gets in an accident while using a business vehicle. Commercial Auto Insurance will cover any resulting claims.
General Liability and Professional Liability are among the most popular policies purchased by business consultants. However they are also complemented by other coverages depending on the size of the client portfolio.
The final cost of insurance for consultants will depend on the industry. Different regulations may result in higher, or lower, insurance costs. Obtain a quote to get a better understanding of the total cost.
Professional liability insurance costs consultants on average less than $55 per month, or $650 per year. This policy, often known as errors and omissions insurance (E&O), provides essential coverage for consultants, including legal expenditures connected to professional blunders and negligence charges.
Put your rules down on paper and follow them. Establish clear professional limits with your customer and request that they do the same. Agree on working hours and response times, and how calls, meetings, and Skype sessions will be scheduled. Ultimately, you can’t prevent all risks from occuring, so it’s best to ensure you have insurance cover in place in the event they do.
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