The one type of liability insurance business consultants should consider
April 25, 2014
Business consultants are valued for their expertise. Make sure your expert advice is backed up by the proper liability insurance.
There are a variety of business consultants: marketing consultants, sales strategists and operations advisors are just a few. Business consultants also arrive at their positions in a number of ways: retired executives looking to stay engaged, corporate refugees who love business, but not office politics and young business prodigies bursting with inspired advice, all open consulting practices as a means of helping businesses maximize productivity. Regardless of what a consultant’s specialty is or how they landed in the consulting field, they should consider small business insurance. The nature of consulting is giving advice, right? And while the advice business consultants give is solidly based in deep knowledge and experience, it often still contains a large element of subjectivity – which can be called into question when clients follow the advice, but don’t achieve the desired results. For this reason all business consultants should consider protection from potential legal problems.
But what specific small business insurance coverage is best for business consultants? Professional liability insurance (PL), plain and simple. Also called errors and omissions insurance, E&O insurance, professional liability coverage protects consultants in covered cases of faulty service (errors) lawsuits and failure to provide a service (omission) cases, paying defense costs and damages up to policy limits. PL coverage protects policyholders even if they believe they did not make the mistake – a situation that occurs more times than not when you’re talking about business consulting. But even if a consultant hasn’t actually made a mistake, he or she can still be sued. That’s why all business consultants should consider being protected by a professional liability insurance policy that covers legal fees. With PL coverage in place consultants may be protected from potentially crippling costs, freeing them to pour 100% into helping clients. Also to consider is the fact that consultants working with larger clients and corporations are often required to have professional liability insurance to secure a contract. While one could scramble to secure E&O coverage in order to be eligible for a contract, the contract negotiations – not to mention the initial sales presentation – will go much more smoother with small business insurance already in place. If you’re a business consultant, take the proper steps to ensure you’re covered. The contents of this article and the linked materials do not offer legal, business, or insurance advice related to the needs of any specific individual business. Hiscox Small Business Insurance is underwritten by Chicago-based Hiscox Insurance Company Inc., which is rated ‘A’ (Excellent) by A.M. Best Company. Additional information can be found on the Why Choose Hiscox?