As a professional consultant or coach, your primary assignment is to satisfy your client with means that brings about growth to their brand. However, Clients can press charges when they don’t get what they want. How do you protect yourself from such lawsuits? Through business insurance. Learn the various insurance cover available to any business consultant such as professional and general liability insurance.
Business Consultant
Consultants are people who render services to others businesses. Becoming one simply means you have the relevant knowledge and also expertise in an ideal business field. Thus you provide guidance for other businesses in your field and gets paid for it.
Business Consultant Insurance
A business consultant will most certainly invest long hours of their time brainstorming diverse means of meeting their clients’ demands. Mostly, the purpose of this demand is to promote their business brands, generate more lead or traffic and also improve sales. Business consultant proffers several theories that improve their clients business. However, clients may become displeased with a consultant’s work.
This happens mostly when clients are not satisfied with the consultant or when the method seems not to yield the result they expected. If this is not adequately managed, it may result in a lawsuit. The impact of a lawsuit is usually severe especially in the absence of an insurance policy. Situations like these highlight the need for insurance in the consultancy business. How does business consultants protect themselves from a lawsuit that has the potential to affect their business and personal finance? It is by getting coverage against these situations.
Types Of Business Consultancy Insurance
- Professional Liability or errors of omission Insurance
- General liability Insurance
- Commercial General Liability Insurance
- Legal expenses Insurance
- Cyber Liability Insurance
- Business Owner’s Policy (BOP)
- Business Personal Property Insurance (BPP)
What Does Business Consultant Insurance Cover?
#1. Professional Indemnity
Professional indemnity protects consultants In the event of any mistake and services that fell short of expectations.
#2. Public liability
Public liability protects business consultants in the event of hurt or damages to someone else’s property by accident.
#3. Employees’ liability
These insurance covers protect you in the event that one of your employees get into an accident or makes a mistake while working for you.
#4. Business and Office
Insurance for business and office equipment provides coverage in the event of damaged, misplaced or stolen office equipment.
#5. Legal Expense
This provides protection in case of legal action against your business.
Professional Insurance For Business Consultant
Professional liability insurance also known as errors and omissions insurance (E&O insurance), protects businesses that provide professional and personal services. It guards business against unforeseen circumstances such as a mistake or bad business decision.
The major job of business consultants is to provide ideas, guidance, as well as strategies to clients who are looking to make a profit and achieve a variety of objectives. Professional liability insurance is a must-have for the business consulting industry.
First being a consultant means you are a professional and this depicts expertise. Therefore, clients expect results. Thus anything short of a productive result will cause them to retaliate in this case, a lawsuit. When it comes to consultancy lawsuits, you can be sued for negligence even when you haven’t made a mistake. Professional liability insurance can get you an attorney and cover your legal costs whether you’re at fault or not. It also covers damages if you are guilty. Luckily, professional liability insurance covers the expenses incurred.
Who Needs A Professional Business Consultant Insurance?
Anyone who renders advice or services to other individuals or businesses. It ranges from management consultants to research professionals and also your favourite wedding planner.
What Does A Professional Liability Insurance Cover
In most insurance companies, errors and omission insurance covers the following,
- Misrepresentation
- Errors
- Inaccurate information
- Omissions
- Negligence
General Liability Insurance
General liability insurance protects your company from lawsuits if someone sustains an injury or damages their property is as a result of your negligence. It is ideal for any business activities associated with people.
What Does General Liability Insurance Cover?
The following is a list of what it covers;
1. Legal Compensation
When someone files a lawsuit against you and you are found guilty, You will pay a legal fee to the Victim. This is known as a compensation fee.
2. Damages On Property
This is the expense incurred during the replacement and repair of damages on someone’s property. The cause of the damage is traced to your business.
3. Medical Expense
This is the medical expense of any injury sustained by the public
If you damage someone’s business property, you must pay for repairs as well as replacements.
Medical bills if someone is hurt in your offices or while you’re working. (For example, a client’s website or rented office space. If it was your fault, you may be responsible for legal fees and compensation.
What Every Business Consultant Do Before Before Buying Insurance Coverage
- Identify Your Business Risk
Before settling for insurance as a business consultant, you need to understand your business risk. What is the possible risk that your business is likely to face? Narrow down your insurance need to your business risk. If you do not have business with cyber, you should not get cyber liability insurance then.
- What Kind of Insurance Coverage You Need
There are several insurance policy coverages for business consultants. You most certainly do not need all of them. The best for a big consulting firm is usually the Business Owners Policy or the Business Personal Property. This is because it offers more than one insurance policy. What is more? it BOP’s price is better than purchasing these policies individually.
- Get Quotes From Insurers
To get quotes, you will have to contact different insurers online or offline and also get quotes for the various coverage they provide.
- Compare Quotes
Compare the quote you collected and also compare them with the coverage each insurer provides. Make sure you settle for the best policy for your business brand.
Cost Of Business Consultant Insurance
The size of a company, the dangers it faces, and the value of its equipment are all factors that determine the cost of consulting insurance. This means there is no cut out a specific amount, it all depends on the business need. All you need to do is identify your business risk and tailor it down to your insurance need.
Another factor that influences the cost of business insurance is the size of the business firm and the clients it renders its services to. Take a look at the following quotes.
Cost Of General Liability Insurance For Business Consultant
According to Insureon, general liability insurance has an average cost of £22.4 per month, or £261 per year, for consulting firms. This coverage covers third-party bodily injury and property damage, as well as advertising-related injuries.
Cost Of Professional Liability Insurance For Business Consultant
The median cost of professional liability insurance premiums for a small firm irrespective of coverage limitations, professional liability has an average cost of about £44 per month and £532 per year.
Conclusion
Business professionals sometimes encounter difficult clients. Sometimes it leads to lawsuits other times, it may not. However, it is best to protect your business from such occurrences using business consultant insurance.
FAQs On Business Consultant Insurance
What insurances should a consultant have?
As a consultant and independent contractor, you should consider having public liability insurance and professional indemnity insurance. If you engage other workers as employees, you will also need workers compensation insurance
Why do consultants need professional indemnity insurance?
Professional liability insurance covers defence costs and damages if your business is sued for negligence, neglect, mistakes or misinformation, whether those claims have a basis or not. Without it, your business is on the hook for any legal costs and a major lawsuit could bankrupt your business or you personally.
Do independent contractors need liability insurance?
General liability insurance is essential for independent contractors because: It protects you and your business. Independent contractors have the same legal obligations and liability exposures as larger firms. They can be sued for damaging client property, causing bodily harm, or advertising injury.
