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4 Types of Consultants That Need Liability Insurance

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Consultant working through proposal
Last Updated: 2/29/2024

Are you a consultant? If so, we have some news for you! We now offer business insurance for consultants. With consultant insurance, you can protect your business and enjoy peace of mind as you help your clients. Let’s dive deeper into consultant insurance and learn more about what it is, who needs it, why you need it, and how it can protect your business. 

Types of Consultants That Need Insurance

The types of consultants that need insurance include:

1. Business Consultants

Are you a business consultant? If so, you may encounter a few claims. A claim may look like a customer visiting your office for a consulting session. While there, you offer them business advice that results in them suing your business because you gave them advice that failed and ended up making the business file for bankruptcy. However, if you have business consultant insurance, your policy could be the source of paying for those expenses instead of your business or your personal bank account. 

In this case, you would need professional liability insurance. This can help protect your business from the costs associated with claims. The costs can include attorney fees and compensation.

IT consultant holding laptop

2. Management Consultants

If you are a management consultant, your risks could include giving the wrong information, bad information, or outdated information. Management consultant insurance can protect you from the repercussions of those risks, which are expensive claims. 

In addition to expensive claims, you could experience a reputation crisis. Having management consulting insurance can help boost your credibility and show that you are a professional willing to work with a client to remedy the problem. 

3. Marketing Consultants

As a marketing consultant, you are tasked with creating social media plans, content calendars, and more for your clients. If your promised results aren’t reached, your client could hold you responsible, suing your business. Protect your business with marketing consultant insurance, specifically general liability insurance, which can protect you from the costs of products-complete operations. 

Marketing consultants insurance can provide the protection you need when running your business. You can coach, consult, and provide creative feedback without the looming stress of what happens when something goes wrong. Insurance takes care of it for you. 

Business consultant presenting information to a group

4. Small Business Consultants

If you consult for small businesses, you will want to protect your business with small business consulting insurance. This can save you money from the often expensive price tag that comes with the cost of insurance claims. 

Insurance can help cover attorney fees, medical fees, repair fees, and more from accidents that occur in your office or with your clients. No matter how careful you are, accidents can often result in thousands of dollars in replacement or legal fees. Get insurance and get away from the stress these claims can bring. 

What Is Covered by Business Insurance for Consultants?

When searching for insurance to protect your business, it is important to note what is covered by liability insurance for consultants. This type of business insurance protects against claims associated with your industry. These claims can include 

  • A client who injures themselves in your place of work
  • A client suing you for misinformation or wrong counsel
  • Third-party property damage
  • Tools and equipment damage if you include Inland Marine Coverage

These claims can be costly and lead to a negative image for your business. However, with insurance for consulting, you can enjoy the ultimate business protection that saves you money when a claim happens. Instead of the claim costs coming out of your wallet, they come out of ours, allowing you to keep running your business with no downtime and very little money lost. 

Also, when you insure your business, it’s important to advertise that you’re a licensed and insured business, which communicates professionalism and trust to potential clients. This can lead to more revenue as you book more clients. 

Marketing consultant meeting with client

How Insurance Protects You

Liability insurance for consultants protects you from the cost when a claim occurs. There can be several different costs when it comes to claims. Costs can include:

  • Medical fees
  • Attorney fees
  • Property damage expenses

Without insurance, you could be faced with paying these expenses all out-of-pocket. This could financially devastate your business. 

To get even more specific on how consultant insurance can protect your business, let’s take a closer look at our coverages. 

General Liability Insurance

This coverage protects against the most common insurance claims. With a $2M aggregate and $1M limit per occurrence, you can rest easy knowing consultants insurance could wover you when a claim happens. 

An example of when you would need general liability insurance includes a customer coming to your place of work with their small child. While in a session, the child trips and splits their head on the edge of your desk. They sued, and you’re stuck with the medical fees and any expenses accrued while your client was out of work. General liability insurance can help protect you from those expensive costs.

Professional Liability Insurance

Also known as errors & omissions or E&O insurance, professional liability insurance protects against claims where you are at fault for misinformation or misguidance. This insurance is essential to protecting your business reputation and is included with your general liability policy. Our professional liability insurance has a $250,000 per occurrence limit and aggregate.

An example of a common professional liability claim could include if you promise a client a result, but that result is not achieved. Your client could sue you for misguidance. This type of claim carries a hefty price tag—think attorney fees. Professional liability insurance can help out with the fees associated with these types of claims.  

Group setting where an instructor is going over key material on a tablet.

Cyber Liability Coverage

If you store client information such as payment information, personal information, business information, or sensitive records online, we highly recommend adding this coverage to your policy. Cyber liability insurance provides protection against claims that arise from cyber security breaches. Claims could include replacing or repairing compromised equipment, lost data, and notifying or compensating customers for lost data. 

These types of claims can be costly not only for your wallet but for your business as well. Cyber security claims could look like your database of sensitive client information—credit card information—getting hacked and stolen. Cyber liability coverage can help protect your business from the costs associated with these claims. 

Additional Insureds

If you practice at an office where you lease the space or attend a conference where you rent booth space, you may be required to list the landlord or event organizer as an “additional insured.” Listing them as an additional insured essentially extends your insurance policy’s protection to them. If they’re named in a suit or claim as a result of something you did, your policy coverages can also help them pay for court costs, medical claims, and other significant costs. You will want an additional insured so your insurance can be extended to them, protecting you from full responsibility for the price of the claim. 

Insurance Canopy offers all these insurance coverages so you can rest easy knowing your business is protected even when accidents happen. 

Small business consultant meeting with clients

FAQs About Consultant Insurance

Do Consultants Need Insurance?

Yes. Here are a few questions and answers to think over. If you answer “YES” to any of these questions, we strongly recommend purchasing insurance for consultants. 

Do You Charge a Fee for Your Professional Services?

If you answered yes and charge your clients a fee for your coaching, consulting, or marketing, you need business insurance for consultants. Why, you may ask? Well, when you charge for a service, you open your business to claims that occur when your professional opinion doesn’t result in the promised results. These claims can stem from misinformation, misguidance, third-person bodily injury, etc. When you charge for a service, your clients expect a good return. 

Do Any of Your Clients or Places You Practice Require You to Be Insured?

Do you rent your office space from a landlord? Or do you attend conventions or events where you rent a booth? If you answered yes to any of these three questions, then you most certainly need insurance for consulting. With consulting insurance, you can add unlimited additional insureds for free. When you add an additional insured, you’re extending your insurance protection to them, which can further protect you from claims that stem from your business operations. 

Do You Provide Administrative Services for a Fee?

Management consultants insurance can protect you in case your client sues you for misinformation or negligence. If your answer is a “yes”, “that’s me”, or “I provide that”, then you need insurance. Why, you may ask? Although you have an extensive background in consulting, mistakes can still happen, and oftentimes, mistakes lead to claims that can be expensive and hurt your business reputation. With insurance, you can protect yourself from that cost and keep your business reputation in top shape. 

Get Covered Today!

So now you know a little about business insurance for consultants. If you’d like to protect your business today, check out our consultant insurance policy and start your quote process. This can be done 100% online in as little as 10 minutes, giving you your quote and purchase options. 

Check out this blog to find out what to look for when purchasing consultant insurance. We are also available to answer your questions via email or phone

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