Risk Management for Consultants: What Insurance Do Consultants Need?
The policy you need to cover your assets depends on multiple factors insurance providers consider, including the type of consulting services you provide, where you’re located, your years of experience, and more. However, most independent consultants or small consultancies require a comprehensive consultant insurance package that includes:
Professional liability insurance
Professional liability coverage – also called errors and omissions (E&O) insurance – is critical for all consultants, as most claims against consultants involve the services they provide. It can cover you if a client alleges you caused them financial harm due to bad advice, poor work or mistakes, negligence, or failing to deliver a service as promised. If you’re sued, it can provide you with funds to defend yourself in court and any financial settlement against you even if the lawsuit is fraudulent.
Commercial general liability (CGL) insurance
CGL, or general liability, is equally vital for consultants. It protects you from costs associated with a third-party bodily injury, property damage claim, or lawsuit. Frequently called ‘slip-and-fall’ insurance, CGL is valuable as consultants typically meet with clients in-person at a client site or your office. That creates considerable risk if someone is hurt in an accident or if your actions damage a client’s property.
Cyber liability insurance
Consultants are trusted by their clients with access to their mission-critical, sensitive data. It’s on you to ensure you keep that data protected and safe. But here’s the problem: data breaches and cyber-attacks against small businesses and self-employed professionals are not uncommon and have been increasing annually. If you’re hit with malware, suffer a phishing attack, or if your systems are hacked, the cost of repairing the damage done to your systems and a lawsuit can be financially devastating if your client sues you for failing to protect their data. Cyber liability protection exists to restore your compromised systems and losses resulting from a cyber-attack, investigate the cause of the incident, and provide your client with credit monitoring services.
There may be additional coverages you may wish to add to your policy, such as legal expense insurance. Speak to a licensed Zensurance broker if you have questions about the coverage you need.
In any event, getting insured is essential to your risk management strategy and business driver. Many organizations will ask to see your certificate of insurance (COI), or they won’t hire you.
How Consultants Can Get Business Insurance
Find out your options to protect your consulting business by filling out an online application to get a free quote. Zensurance specializes in helping small businesses, startups, and self-employed professionals get the insurance protection they need by shopping our partner network of over 50 insurance providers.
Protect your business, assets, and reputation in just a few clicks, and stay focused on helping your clients be successful.
— Reviewed by Justin Tisdale, Team Lead, Professional Lines, Zensurance.