Consulting is a dynamic field, filled with highs, lows, and the occasional curveball. Whether it’s a surprise project hiccup or a challenging client dispute, things don’t always go as planned.
The good news? With the right insurance in place, you can stay on your feet no matter what the job throws your way.
8 Types of Insurance Consultants Need
No matter your area of mentoring expertise, these are the top eight most essential coverages for consultants and how they help you keep your practice protected.
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When it comes to protecting your consulting business, picking the right coverage is crucial.
Whether it’s managing client expectations, protecting sensitive data, or avoiding financial losses from a mistake, here’s what each coverage can do for you.
Also known as errors and omissions, this protects you from claims of consultant mistakes, negligence, or unmet promises. Legal defense can get pricey, even if the claim is baseless!
What it covers:
✔️ Legal defense costs
✔️ Inaccurate advice
✔️ Negligence claims
✔️ Misrepresentation
How it works:
A client sues for professional negligence after you provide incorrect data in their campaign. This coverage helps pay for legal fees and settlements.
Often called “slip-and-fall” coverage, this covers third-party claims like bodily injury, accidental property damage, advertising mistakes, and reputational harm.
What it covers:
✔️ Bodily injury claims
✔️ Property damage
✔️ Personal and advertising injury
How it works:
If someone trips over exposed cables at your seminar, this policy helps cover medical costs and any legal fees.
This coverage helps pay for medical expenses and lost wages if one of your team members gets hurt on the job. Plus, most states require workers comp insurance if you have at least one employee.
What it covers:
✔️ Medical expenses
✔️ Wage replacement
✔️ Ongoing care
✔️ Employer liability
✔️ Death benefits
How it works:
If your employee trips during a meeting and sprains their ankle, this coverage helps pay for their medical bills and a portion of their lost wages, so they can focus on recovering without worrying about finances.
Pro Tip: Injuries like repetitive strain, slips, or work-related stress can still occur to remote teams and employees.
Cyber liability insurance protects your business from financial losses due to data breaches, cyberattacks, or accidental online leaks of confidential information.
What it can cover:
✔️ Forensic fees
✔️ Cyber extortion (ransomware)
✔️ Crisis management and public relations
✔️ Recovery and restoration of data and systems
✔️ Business interruptions
✔️ Financial fraud
✔️ Unintended disclosure of personal information
✔️ Credit monitoring for impacted parties
✔️ Regulatory fines and penalties (PCI-DSS)
✔️ Settlement and legal fees
How it works:
If you accidentally click on a phishing email, hackers may access client data, leading to a lawsuit and fines. This coverage helps with legal fees, fines, client notifications, and data restoration.
Did You Know?
Over 40% of small businesses face cyberattacks each year, and consultants are especially at risk due to email use, cloud storage, and online payments. Handling client data or transactions online can increase your risk of an attack.
Fidelity bonds protect your clients from employee fraud and can be a contract requirement for consulting firms. It builds trust and keeps your reputation intact.
What it covers:
✔️ Employee theft of client funds or property
✔️ Financial losses due to dishonest acts
How it works:
If an employee secretly forges invoices and steals overpayments, the fidelity bond reimburses your client, protecting both your business and your relationship.
Adding clients or partners to your policy extends your coverage to them, so if they’re named in a lawsuit due to your work, they could be financially protected. Many contracts require additional insured status to reduce liability risks.
What it covers:
✔️ Legal costs
✔️ Liability protection
✔️ Contract compliance
How it works:
If a participant sues you and the venue after tripping over a cable, your general liability policy covers the venue’s legal costs, saving both of you from the financial hit.
Also known as inland marine insurance, this protects your business assets from theft or damage, like expensive technology, supplies, or specialized equipment.
What it covers:
✔️ Theft of business equipment, supplies, or tools
✔️ Accidental damage to work gear
How it works:
If you accidentally drop your laptop during a client meeting and crack the screen, this insurance can cover the repair or replacement costs.
This provides coverage for accidents that occur while driving for work-related purposes. Oftentimes, personal auto insurance may not cover business-related accidents.
What it covers:
✔️ Auto liability, bodily injury, and property damage
✔️ Uninsured/underinsured motorist coverage
➕ Hired/non-owned auto coverage (optional)
➕ Roadside assistance (optional)
➕ Rental reimbursement (optional)
How it works:
A marketing consultant rear-ends a car on her way to a client meeting. Her personal auto insurance won’t cover it, but commercial auto can step in to cover medical bills, car repairs, and a rental car while hers gets fixed.
How Much Does Consultant Insurance Cost?
Insurance Canopy offers policies starting at $21 per month, but consultants can save up to 14% by choosing annual payments. Consultant insurance costs vary depending on factors such as the type of consulting services offered, coverage limits, and claims history.
Consultant Insurance Requirements
While there are no specific legal regulations requiring insurance for consultants, most clients prefer consultants to carry at least:
- $1 million in general liability coverage
- $1 million in professional liability coverage
- Workers compensation coverage if you have employees (besides yourself)
How to Apply for Consultant Insurance
Applying for consultant insurance is quick and easy:
- Start your free quote
- Fill out a short form
- Receive an instant, custom quote
It’s that easy to get the coverage you need to protect your consulting business!
Protect Your Consulting Business With Insurance Canopy
No one can predict the future, but with the right insurance coverage, you can ensure your consulting business is prepared for whatever comes your way.
From legal issues to unforeseen accidents, being proactive today means less stress tomorrow. Get covered today!
Questions About Consultant Liability Insurance
How do I protect myself as a consultant?
You can protect yourself as a consultant by:
- Investing in the right types of liability insurance
- Having a well-crafted contract with clients
- Maintaining clear communication
- Keeping your skills up-to-date
How much does a $1,000,000 liability insurance policy cost?
A $1,000,000 liability insurance policy for consultants can cost as little as $21 per month with Insurance Canopy. This includes both general and professional liability coverage, with a limit of $1,000,000 for each claim. The price may vary based on your business size and needs.
Are subcontractors or part-time consultants covered under my policy?
Subcontractors and part-time consultants are not covered under your policy. They’ll need their own separate coverage to be fully protected. It’s important to make sure anyone working with you has the right insurance in place.
What is the process for filing a claim?
Filing a claim is simple with Insurance Canopy:
- Log in to your dashboard
- Go to “Manage Policies”
- Click “File a Claim” and provide your details
A claims adjuster will reach out to guide you through the process. Our support team is also available if you need help.
Will liability insurance cover disputes related to intellectual property or non-compete clauses?
Liability insurance may cover disputes related to intellectual property disputes, but it will not cover non-compete clauses.
Professional liability insurance is designed to cover copyright infringement related to professional services, such as using copyrighted content in a report. However, trademark and patent infringement are typically not covered under professional or general liability insurance.
Non-compete disputes generally fall under employment practices liability insurance (EPLI). Always review your policy with your insurer to understand exactly what is covered in these cases.
Do I need a separate policy for working on-site at a client’s office?
No, you don’t need a separate policy for working on-site at a client’s office. Your general liability policy typically covers you for on-site work, but it’s important to review your policy to ensure you’re fully covered.
Can liability insurance help if I face a cyberattack or data breach while working with client information?
Yes, cyber liability insurance covers you if you face a cyberattack or data breach while working with client information. It helps pay for legal fees, client notifications, data restoration, and public relations costs.
JoAnne Hammer | Program Manager
JoAnne Hammer is the Program Manager for Insurance Canopy. She has held the prestigious Certified Insurance Counselor (CIC) designation since July 2004.
JoAnne understands that starting and operating a business takes a tremendous amount of time, dedication, and financial resources. She believes that insurance is the single best way to protect your investment, business, and personal assets.
JoAnne Hammer is the Program Manager for Insurance Canopy. She has held the prestigious Certified Insurance Counselor (CIC) designation since July 2004.
JoAnne understands that starting and operating a business takes a tremendous amount of time, dedication, and financial resources. She believes that insurance is the single best way to protect your investment, business, and personal assets.
