Insurance For A Consulting Business
Like most businesses, the consulting industry needs to be protected by business insurance. Many different risks affect consultants, such as misinformation, employee injuries, wrongful termination of employees, and cyber attacks on client data. The most common insurance coverage consultants may need is:
Professional Liability - Protection for work mistakes such as misinformation, incorrect advice, and undelivered services. Professional liability is also known as E&O insurance coverage.
General liability or BOP - Provides coverage for our business property and general liability, including coverage for your client's injuries or property damage. BOP coverage can also include advertising injury.
Cyber Liability - Covers your business for damages from cyber attacks, hackers, and client data breaches.
Employment Practices Liability Insurance - EPLI coverage protects your business against lawsuits against an employer for wrongful termination, retaliation, or discrimination.
Workers Compensation - Workers comp insurance is required if you have employees and provides coverage for an employee's lost wages due to a workplace injury. Workers comp also protects your business against a lawsuit resulting from an employee's injury.
How Do I Protect Myself As A Consultant?
Depending on your consulting field, you will most likely need E&O or professional liability to protect your business. If a client files a lawsuit for not getting the correct advice, or if your client is dissatisfied with their consultant's performance.
If you have employees, you are required to maintain a worker's compensation policy.
If you do any advertising or meet with clients, there is the risk of property damage or client injury. Therefore, we also recommend a Business Owners Policy (BOP).
Are Consultants Covered By Insurance?
Consultants should property cover their business with the appropriate insurance coverage. An independent insurance agency such as OIA can help you find the right insurance company and coverage for your business.
Can Consultants Be Held Liable?
Consultants can easily be liable for misinformation and inadequate or incorrect professional advice. Additional exposures to consultants are:
Client injury and property damage
Employee discrimination, sexual harassment, or retaliation claims.
Do Consultants Need Professional Liability?
If your consulting business provides advice or information to clients, you should have a professional liability policy to cover the risks that apply to professional advice.
Consulting Businesses That Give Professional Advice
Incorrect professional advice and misinformation can lead to lawsuits and claims. A consulting company must have a professional liability policy in place to protect the business from these types of claims.
Insurance Coverage For Consulting Businesses With Employees
If your consulting business has employees, you need a worker's compensation policy to protect against employee injuries. A worker's compensation policy protects the employee against lost wages from an injury, and the employer is also safeguarded against employee lawsuits.
We also recommend you have an Employee Practices Liability Insurance policy (EPLI) to protect your business from employee lawsuits resulting from discrimination, retaliation, and wrongful termination claims.
Consulting Businesses With Client Data
Most businesses utilize technology to store client data, and cyber-attacks, data breaches, and hacking are becoming more prevalent. Therefore, we recommend a Cyber Liability Policy.
Cyber liability insurance can cover the cost and business liability of data breaches involving sensitive customer information and cyber attacks on your business. The coverage can include:
The cost of investigative services and data recovery
Cyber liability coverage can provide third-party damages if your customers or clients are affected due to a cyber-attack or data breach involving your business or company. Legal fees, settlement costs, and social media liabilities are examples of this.
Protection against advertising injuries for a consulting business
Your business could be susceptible to defamation and copyright infringement when you promote your consulting services online or over social media. A Business Owners Policy or Commercial General Liability policy can include accidental advertising injury coverage.
The Bottom Line:
Starting a new consulting business can be a challenge, be sure to protect yourself and your business by purchasing the right insurance coverage for your needs. 80% of businesses are paying too much for insufficient coverage. We solve this by partnering with many insurance companies to find the right coverage and premium fit for your business. The OIA provides a better insurance experience and helps businesses make better insurance decisions by helping you understand the insurance coverage you are purchasing.