General Liability Insurance For Consultants - As an independent consultant, your job is to provide perspective and share your knowledge with your clients so they can build their businesses successfully. Giving business advice can be an extremely rewarding career, but it can also be risky! You may have all the advice you need to help your clients succeed, but if you're not protected with the right insurance coverage, you could lose everything you've invested in your hard-earned success.
While insurance isn't the first thing you think about when starting a consulting business, it's an important step to take early on, and it's less costly and complex than you might think. In this article, we have compiled 101 consultant insurance options so that you can make the right decision for your business.
General Liability Insurance For Consultants
So why should you invest in advisory insurance? Presenting yourself as a personal consultant means you won't have an employer to support you if a legal issue arises. The bigger your client's business and the bigger the case you're working on, the more you risk your recommendation.
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A well-written consultation agreement can provide a solid foundation for your client's commitment terms. However, there are many cases where it cannot protect you, and even if you have done everything right, you must cover the costs of hiring a lawyer to handle your case. Accidents can happen to your or your client's property at any time during a meeting, and if you have one or more employees, you are responsible for them.
Additionally, some clients may request an insurance certificate before signing your contract and may view this as a sign that you are serious about your consulting practice. A way to enhance the filing process and convey professionalism!
Now, the wide variety of insurance packages you'll find on insurance sites may seem intimidating at first glance, but there are actually only a few you need to look out for as a consultant. So, let's take a closer look at each one to see what they cover.
Let's take care of your health before we take care of your business. If you have recently left your corporate job to start working alone (in this case, thank you!), it means you will no longer receive employee benefits such as health insurance.
Do I Need More Than Just General Liability Insurance?
Companies like COBRA can help you get insurance for another 18 months after you leave. Another option is to have insurance through your loved one's employment with companies such as the Partner's Plan (even if you are not married) if you meet the criteria for "domestic partner" (including same-sex couples). If these options are not for you or you prefer something else, you can view individual insurance plans at HealthCare.gov or choose a small business insurance plan.
If you visit customers (or if they visit you), you should definitely consider taking out liability insurance. This package protects you from claims if someone is injured or injured or your customer's property is damaged.
It all feels like it only happens to "other people" until your client accidentally jumps down the stairs on their way to the conference room you rent, or you spill a glass of water on their laptop. If you file a lawsuit, your liability insurance will cover both your legal defense and your client's medical care.
Additionally, customers and service providers (for example, the co-working space where you rent a conference room) often require you to provide proof of this type of insurance. They also know that when things go wrong, it's best to leave it to the insurance companies.
General Liability Insurance For It Professionals
Professional liability insurance, also known as error and negligence insurance, will protect you if you, as a consultant, are accused of negligence. Let's say you've done all the research in the world and developed a solid strategy for your client that impresses them. Then they came back a few months later with a lawsuit claiming they lost thousands of dollars because of your advice.
You accidentally left out important information, made a mistake, or did everything right, but your client still believes you were the cause of their money loss, it could cost you your job if you don't have legal protection. Your professional liability insurance will cover your attorney's legal defense costs and any settlement or loss that may arise in your case.
Business personal property insurance is essential to ensure the safety of all your belongings used to run your business. Whether you run a fully equipped office or work alone from your home office, this insurance package covers everything from your phone to office facilities. If you're away from home and your laptop is stolen or lost, you'll want to make sure it's protected by business personal property insurance.
This also applies to the car you drive to meetings. There are over 6 million car accidents in the US alone each year and god forbid you won't be in an accident, but if you do, your insurance will cover the cost of expensive repairs.
Professional Liability Insurance
As a consultant, you can access inside information of the companies you work for. Keeping this information private is one thing, but cyber attacks and data breaches can happen to anyone, including you, and lead to unwanted legal action.
About 60% of small businesses that experience a data breach shut down within six months of the attack because they cannot afford the high costs associated with their consequences. Your cyber liability insurance (sometimes called cyber risk insurance or data breach insurance) will protect you in these situations and cover all legal fees to keep you on your feet.
The cost of your insurance as a consultant will largely depend on your individual situation. If you have a clean claims history and several years of experience as a consultant, this can help you lower rates on your preferred packages. However, if you're in an industry that tends to be riskier than others, this can come with higher costs.
You will need to weigh your options and choose the coverage limit that you think is sufficient for your particular business. Naturally, the higher your coverage limit, the more you have to pay.
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These are some of the general fees that insurance companies usually charge advisors, but we recommend that you do your own research and ask for a quote from your shortlisted insurance providers.
Pro tip: Most insurance companies offer what's called a BOP or owner's policy, which allows you to combine multiple insurance plans and get the best deal for them all. Make sure you bring this up at your meeting with them - it never hurts to ask!
Hiscox is the top-rated insurance company, covering more than 180 different professions in 49 states. They specialize in micro and small businesses, including sole proprietorships.
They provide unified packages for niche professions, including consultants like you, so you can be sure your unique business needs are not new to them. You can purchase insurance packages online with a simple application process, and they have several options to customize your package and choose the one that suits you best.
Is General Liability Insurance Worth The Cost?
Thimble is an insurance company that prides itself on being able to insure you in 60 seconds (yes, you read that right!). They have the most flexible packages with annual, monthly, weekly or even hourly coverage options.
While it's always a good idea to plan ahead and think about the long-term future of your business, this is a great option if your business event is more of a one-off or seasonal nature. They also offer packages that you can adapt to the size of your business over time so that your insurance can scale with you as you grow.
If you like to compare options to make the most informed decisions, SimplyBusiness may be for you. Their platform lists the best small business insurance companies with great analysis of their features.
There are many companies on their list that provide all the consulting insurance packages you need at a reasonable price, and you can request a quote directly from them. This way you can compare what they offer and make sure you choose the one that best suits your expectations.
Business & Commercial Liability Insurance
You've probably heard of AXA, one of the world's largest insurance companies operating in 54 countries. Don't think that they only work with giant companies: Their portfolio has a wide range of individual insurance plans suitable for individuals and small businesses. They also have a 24/7 support line to help you navigate their policies more easily and choose the right coverage for your business.
Have you ever wondered what exactly other trainers offer and at what price? Find out if you're charging too much or too little by comparing your own prices with this free report. Liability insurance covers your business against a variety of significant risks, including accidents to customers and employees. Owner policies cover additional risk factors such as fraud or product recalls.
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