Consulting Firm Insurance
Consulting Firm Insurance Information
As a professional consultant, your clients rely on you for accurate and thorough services and guidance. Even a slight miscalculation, lapse in attention or oversight could have significant financial consequences for your clients, which you may then be held liable for. Such incidents may devastate your business’s finances, reputation and future growth, and even if allegations of wrongdoing are unfounded, the cost of defending yourself against a lawsuit could create sizable out-of-pocket costs. With these things in mind, your consulting business should prioritize an adequate insurance portfolio.
What Is Consulting Insurance?
As a consultant, you must implement and maintain various loss control measures, including suitable insurance. However, while some insurance companies may offer prearranged packages intended to help cover your risks and exposures, your business may often need to craft its own consulting insurance portfolio by assembling several different policies. While specific insurance needs may vary among different consultants, you should generally consider acquiring the following:
- Errors and omissions (E&O) insurance—Also known as professional liability insurance, this coverage can help pay for financial losses and legal costs if your consulting firm is accused of providing services that were negligent, misrepresented, inaccurate, late or otherwise inadequate.
- General liability insurance—This coverage provides additional liability coverage if you or your business are at fault for an incident that affected a third party, such as bodily injuries, property damage or advertising injury. Your policy can insulate you from losses by helping to pay for medical bills, lost or reduced income, damaged property and legal costs.
- Commercial property insurance—This coverage can provide financial assistance if physical property used to operate your consulting business is lost, damaged or stolen. Your insurance may cover buildings, electronics, equipment, furniture and inventory.
- Business interruption insurance—This coverage, also known as business income insurance, can render financial aid if a covered incident forces your firm to pause or alter its normal operations temporarily and can help pay for various expenses, including rent, payroll and recouping lost income.
- Workers’ compensation insurance—Generally required by law, this coverage can help pay for losses and costs if your employees are injured on the job or develop a work-related illness. This may include paying for medical bills, disability benefits, lost income and vocational rehabilitation.
While the aforementioned coverages may apply to most consultants, your firm should also work with a qualified insurance professional to identify any additional needs. For example, if you store sensitive data or regularly use motor vehicles, you should prioritize cyber liability and commercial auto insurance, respectively.
How Much Does Consulting Insurance Cost?
Insurers must conduct a thorough analysis of your business’s circumstances before being able to identify your coverage needs and provide a quote for a suitable insurance package. Generally, this process will include consideration of the following criteria:
- Type of consulting
- Number of employees
- Experience levels
- Assets and revenue
- Prior claims history
- Portfolio details (e.g., coverages included, deductibles, policy limits)
Get the Right Coverage
With over 50 years of experience helping individuals, families and businesses assess and address their coverage needs, the dedicated staff at Lohman Companies are well-equipped to help you acquire and maintain optimal consulting insurance. Contact us today to get started.