Consultant Insurance: Liability, Cost & Quotes From $7

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“Do I need insurance for my consulting business?” The answer to this is a yes. And regardless if you work as a financial consultant or any other type of business consultant, an appropriate coverage will always be helpful to secure clients and protect your finances.

There are many types of insurance to choose from, depending on the type of consulting service you offer. For example, if you help organizations comply with laws and regulations that protect nature, then you can go for an environmental consultant insurance package.

Nonetheless, generic consultant insurance works best if you provide different types of consulting services. This guide will take you through what policies are included, the cost of premiums, and the best companies to approach for comprehensive consultant insurance coverage.

Do Consultants Needs Insurance? 

As highlighted, chances are that you have pondered over whether you need insurance for consulting services. Further, chances are you have already consulted on insurance needed for consulting business. The simple answer is that you need insurance, seeing as financial tassels can take a significant toll on your business's finances. 

Note, however, that simply purchasing consultant insurance is not sufficient. You want to start by first determining the level of coverage you need. You'll then proceed to balance the deductible levels and the premium payments you are most comfortable with. All of these will determine the type of consultant business insurance you get. 

Consultant Liability Insurance 

Consider a situation whereby a client sues you due to the services provided. You risk defamation and, even worse, loss of business. Liability insurance for consulting business steps in helping you deal with the legal matter at hand. You badly need this commercial insurance for consultants. The policy covers the legal fees arising from the case, thus ensuring you don't have to pay for any of it out of pocket. 

Most insurance providers will sell this as general liability insurance for consultants which will take care of any financial ramifications brought on when a third party files a claim against your business. 

What if you are a consultant operating as a sole proprietor? Without having independent consultant liability insurance, you are personally responsible for any damages as reported by a third-party complainant. Given the fact that you are primarily responsible, you want to get comprehensive general liability insurance for independent consultants simply to protect yourself. 

For most providers, they will include public liability insurance for consultants as part of their general liability policy. This means that if a member of the public were to file a lawsuit against you, you would have the policy to cover any resulting costs. 

Professional Liability Insurance for Consultants 

You also need professional liability insurance. Professional liability coverage for consultants is often referred to as errors and omissions insurance for consultants. E&O insurance for consultants, in short, is a must-have as you are likely going to end up being sued for negligence or mistakes that cost your clients money. 

The unfortunate thing is that you might end up being sued for negligence even when you didn't necessarily make a mistake. It would be best that you read your policy's terms and conditions to get the full details of your policy. In most instances, the following will not be covered by this type of consulting business insurance:

• Fines and penalties 

• Circumstances that existed prior to the date when you signed the policy 

• Injury or loss in a joint product 

An additional means through which you can protect your business is through professional indemnity insurance. Also known as PI cover for consultants, this policy covers you and your business in the event that one of your customers claims that your service or advice is inadequate. 

Further, the policy will cover you in the event that your advice as a consultant resulted in financial loss for the client. It covers the legal fees and any other expenses that are incurred as a result of your defense. Additionally, the policy covers all damages or costs that will be awarded to the client. 

Note that the errors and omissions policy does not cover damages to third parties from cybersecurity breaches. If you have access to your client's electronic data, both personal and financial, you want to talk to your insurer of choice to discuss whether they can include cyber liability as part of your packaged business insurance for consulting companies

Workers Compensation Insurance for Consultants  

Granted, consulting is relatively low-risk. Still, your employees are susceptible to a number of accidents that could have serious legal and financial ramifications. That's where workers' compensation insurance for consultants comes in. 

This small business insurance for consultants covers the medical costs and lost wages for work-related injuries and illnesses. Note that most states will actually mandate that you provide proof of insurance before they can give you a license of operations. Overall, workers' compensation policies provide coverage when it comes to:

• State law compliance

• Employee injury lawsuits 

• Employee work-related injury expenses 

Consultant Insurance for A Day  

If you need to protect your practice against claims of negligence, errors, or omissions for a day, you are going to need consultant insurance for one day. This one day consultant insurance comes in handy when you just landed a short-term contract and you need protection for the said contract. 

Moreover, if you are between policies, the daily consultant insurance will be sufficient, giving you enough coverage before you decide to lock in on a policy. 

Further, having the one day consultant liability insurance gives you the flexibility that is otherwise unrivaled. You can get instant coverage in just a few clicks which will be sufficient to protect you.

Consultant Insurance Cost

Several factors contribute to consulting business insurance cost, including the size of your consultancy business, the risks therein, and equipment value. The best advice would be to consult different insurance providers to get a pool of consultant liability insurance costs. 

When it comes to the cost of general liability insurance for consultants, you will pay $34 per month or $408 per year for a $1 million coverage. This policy will provide protection for third-party bodily injury and property damage. Advertising injuries are also covered within this policy. 

When it comes to the cost of workers' compensation policies, the amount you pay for the coverage will be based on every $100 of your business's payroll. The premiums will be determined by the particular consultation service your employees offer.  On average, premiums will be about $49 per month and $500 per year.  In some states, the local government will set its own requirements for workers' compensation. Note that as an independent consultant, you will not be required to purchase a workers' compensation policy

To further get an idea of consultant insurance cost, here’s a table showing the rates of the best companies:

To get a very solid understanding of much you’ll pay for the business insurance for independent consultants and employed consultants, we suggest you compare several quotes. Start by clicking the “Get Quotes” button on this page.

Professional Liability Insurance Cost for Consultants  

When it comes to errors and omissions insurance cost for consultants, the median premium will be less than $55 per month or $650 per year. This cost of E&O insurance for consultants will cover a $1 million per occurrence limit and a $1 million aggregate limit. Note that higher limits costs will correspond with better coverage.