Consultants are individuals who are paid to provide their professional expertise, typically on a specific topic, project and/or industry. There are many factors that contribute to a successful consulting business, such as consistent clients, marketing efforts, and networking. Another factor for success is getting the right coverage.
Insurance protects consultants against different risks, such as unexpected events that stop their business operations, which in turn impact their clients and increase costs. To learn more about the different business insurance consultants' needs, check out our comprehensive insurance guide below.
Insurance and consultants: nine coverages to consider
Insurance for consultants can be divided into seven essential policies that you'll want to consider as a business professional. These coverages include:
1. Commercial general liability insurance
Commercial general liability insurance coverage protects a consulting business from liabilities which cause the business to lose money. For example, should a customer become injured because they fall in a consultant’s office, the consultant could be sued. If this occurs, a business general liability insurance policy will cover costs, including medical expenses, legal fees, and settlement funds that may arise. Check out our article about the main types of business insurance to learn more.
2. Consultant professional liability insurance
Another beneficial coverage is advertiser’s liability insurance, also known as errors and omissions insurance (E&O insurance). Professional liability insurance coverage can provide protection for consultants should someone claim the consultant stole their existing concept.
For example, if a consultant had a billboard ad and another organization claimed the ad misappropriated its own advertising concept, the consultant could be sued. Luckily, with liability insurance for consultants, legal expenses and other costs will be covered up to their policy limits to ensure they don't experience a significant financial loss.
3. Business equipment breakdown insurance
Equipment breakdown insurance is another type of business insurance for consultants that covers anything which is mechanical and under pressure. This includes boilers, photocopiers and air conditioners. Should equipment suddenly or accidentally break down, this coverage would cover the cost of repairs.
“This is important coverage because breakdowns are often expensive,” said Arsenault. “Also, they damage the business’ operations and income.”
To learn more about what would be covered by a policy, it’s important for consultants to speak with a BrokerLink broker and protect your business today!
4. Business property insurance
Business property insurance protects consultants from risks associated with the physical location of their business and whether or not they own, rent or lease space for their business. Here are some examples:
Renting space as a consultant
Consultants who rent space may be subject to leasehold improvements – where they may be required to pay for building improvements outlined in their lease.
In this scenario, brokers often ask for a copy of the lease to understand the consultant’s obligations as a tenant. This will help a broker find the proper consultant's insurance coverage.
Running a home-based consulting business
Home-based consultants still need to consider business interruptions – incidents (such as a power outage) that disrupt their business operations. If the consultant needs to relocate because of an interruption, they will need to pay for another location – which will be protected by the “extra expense” portion of interruption insurance.
Operating the business near a potential risk
Should the consultant operate their business in an area where there may be a risk, this will determine the type of insurance coverage a broker will need to find to protect the business. For example, being located by a body of water may mean considering overland flood protection.
5. Interruption insurance for consultants
Business interruption insurance coverage deals with events, such as a fire, which stop the consultant from running their operations. For example, if there is a power outage, a consultant’s computer may not work. As a result, they may not be able to access their email and, therefore, lose potential business.
However, with this type of consultant insurance, your interruption insurance policy will protect you by paying for things like lost wages, rental costs, and other fees until you are able to get your consulting firm back up and running again.
6. Professional liability and errors and omissions coverage
Professional liability and errors and omissions coverage protect consultants in the event that they make a mistake (an error) or forget something (an omission) when they offer their services to a client. The consultant’s error and/or omission could result in a lawsuit.
Another scenario where liability insurance for consultants would kick into play is if a client sues you for alleged losses, misconduct, or a failure to deliver business professional services as promised. Again, you can anticipate liability insurance for consultants to cover the attorney fees, court costs, and other expenses that may arise.
7. Cyber insurance
With more consultants and businesses using servers and cloud-based technologies to store their business and customer information, there are more risks of cyber-attacks. Should a server be hacked, customer data or personal information about customers (i.e., credit card details or addresses) and the business (i.e., financial information) could be compromised.
If a consultant’s computer is hacked, there will be costs to manage damages because of the hack. Cyber insurance for businesses covers damages incurred because of a compromised system.
“Also, if a consultant uses a third-party site to receive payments, and they do not have cyber security, they are responsible for any damages to their business or customer if a hack occurs,” said Arsenault. Preventative measures are always key. Learn how businesses can protect themselves from cyber-attacks.
8. Home consulting services
Standard home insurance may not be enough to protect you if you operate your consulting firm from inside your house. But, with home business insurance, you'll have the coverage you need in case an insured loss occurs that causes property damage to your workspace.
9. Auto insurance policy
For consultant businesses on the go, business auto insurance is a must. With this coverage, you'll be protected in the event you get in a car accident while conducting business activities. Insuring business vehicles with this type of auto coverage will also protect your business employees who operate your fleet if you have more than one vehicle.
Own a consulting business? contact BrokerLink for customized business insurance today
Consultants can learn more about how insurance protects their business by contacting a BrokerLink broker. BrokerLink’s commercial insurance experts will find the right insurance coverage which fits the needs of the consultant.
Whether you have questions about how to improve employee well-being, make your small business accessible, or talk to us about small business healthy equity plans, our brokers will work closely with you to ensure that you find affordable business insurance that will help you carry out your day-to-day operations with peace of mind.
“Our job as brokers is to ensure our customers get the best insurance protection,” said Theresa Arsenault, BrokerLink commercial insurance manager. “At BrokerLink, we have access to different markets or insurance products. This means we can find insurance coverage which fits the unique needs of the consultant’s business. For example, should a consultant relocate their business from a home-based operation to an office, we can still find coverage to reflect that change.”
Contact BrokerLink over the phone or visit us in the office! You can also get a competitive quote for business insurance online using our free quote tool!
[phone]
FAQs about consultant insurance
Is employee dishonesty covered by my insurance company?
So, when it comes to employee dishonesty, is your business covered? The short answer is yes. You can purchase specific liability insurance from an insurance provider that covers scenarios where one of your paid employees commits a dishonest act against your firm or one of your clients. We suggest speaking to your provider for more information.
What are some of the most common business claims scenarios that I should be worried about?
Common business claims scenarios that are covered under standard insurance policies include loss of tools, stolen property, employee theft, slip and fall accidents, lawsuits and other legal action that arise as a result of guidance provided to clients, and more.
What are common business liabilities?
Now, in terms of common types of business liabilities, they are typically divided into short and long-term liabilities. Both current liabilities and non-current liabilities reflect the overall amount of money your business owes to another. That said, current liabilities reflect money that is due within 12 months, and long-term liabilities are how much money is owed later in the future. Current liabilities are typically paid with current assets the firm has. In contrast, long-term liabilities are more likely to be paid with a loan.
How do I find the right coverage for my consulting firm?
If you're still wondering: "How do I find the right insurance policy for my business?" We suggest working with a broker. Brokers work independently from providers, meaning that they are able to help you shop around for the best deals and coverage options. Brokers are also able to provide you with unbiased advice regarding your coverage and offer solutions for your business needs.
If you have any questions, contact one of our local branches.
