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Who needs management consultants’ insurance?
Management consultants, who assist clients with financial, staffing, company hierarchy and technology decisions, should have professional and general liability insurance. Problems can arise when working with clients who do not agree with certain approaches or methodologies. Obtaining small business insurance is a great way to protect yourself while continuing to provide beneficial consulting services to your clients. This is particularly true for consultants who work privately or own a small business.
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Insurance policies available for management consultants
For most management consultants, there are three main types of insurance policies that will be worth considering—each of which can provide its own unique aspects of protection to help you run your consulting business with confidence.
Professional liability insurance for management consultants
Professional liability insurance—sometimes called E&O insurance—provides a number of potential benefits to business advisors, including coverage for negligence, personal injury (such as libel and slander), defense costs, and also claims against past-rendered services. Though claims including fraudulent acts, bodily injury and property damage usually aren't covered under this policy, this type of insurance coverage is important for professionals who regularly provide services, consultation or advice to clients.
Here’s an example of how a professional liability insurance policy could protect a management consultant. A company hired a consultant to make recommendations as to how to improve sales, which were declining. The consultant made several suggestions around staffing, including terminating two low-performing sales reps. The company implemented some recommendations, but kept the sales reps on. When sales continued to decline, the company sued the consultant. A professional liability policy could pay to defend the consultant, as well as the cost of any settlement or judgment.
If a client should react negatively to your work as a management consultant or feel as if they or their business have been damaged in some way by the services you provide, you or your business may be sued. Legal problems for management consultants can come in a number of different forms, such as advertising injury and similar claims.
General liability insurance for management consultants
While professional liability coverage is important for management consultants, there are a number of scenarios that are not typically covered under this form of insurance. General liability—also called commercial general liability (CGL)—covers consultants against property damage, claims of bodily injury and associated medical costs.
For example, if a management consultant accidentally trips over a laptop cord and knocks over an expensive antique vase when having a meeting in a client’s office, a general liability could cover the cost to replace the vase.
General liability also covers electronic data liability, which is important for consultants who store sensitive information on business-related equipment. Though your property won't usually be covered under management consultant liability insurance, damage sustained to third-party property will be.
Business owners policy (BOP) for management consultants
For many management consultants, a business owners policy (BOP) may be the best choice. A BOP is a combination of general liability and business property insurance and is often used to provide coverage to small businesses with the aim of protecting valuable equipment.
For example, if the office a management consultant rents was damaged by fire, their BOP policy would pay to replace their furniture and equipment that was also damaged, and get them back to work quickly.
Why do management consultants choose Hiscox?
At Hiscox, we understand just how much work goes into being a management consultant. Whether you've opened your own business or are working as an advisor in a different capacity, we can help you grow your career by reducing risk with our small business insurance policies, allowing you to focus on what really matters: providing exceptional consulting services to your clients.
Here are six reasons why management consultants choose Hiscox above other providers for professional liability insurance and general liability insurance:
- Flexible payment options: We offer you the option of making monthly payments (with no additional fees) to help you manage your cash flow.
- Tailored insurance: We specialize in businesses like yours and tailor coverage to the risks in your field.
- Claims responsiveness: When a covered claim is reported, Hiscox will immediately assign a dedicated claims representative to assist you.
- Coverage for contracts: Our architects insurance coverage satisfies most standard contract insurance requirements.
- Worldwide coverage: A business insured through Hiscox is covered for work done anywhere in the world, as long as the claim is filed in the U.S., a U.S. Territory or Canada.
- Passion for service: Agents knowledgeable about your business concerns will provide you with excellent service—4.7/5 people surveyed recommended us.
Ready to learn more about how Hiscox insurance can help mitigate risk with management consultants’ insurance coverage? Get a fast, free quote online. If you have questions, call us at 1-866-283-7545 and speak with a licensed Hiscox insurance agent, Monday – Friday, 7am – 10pm ET.
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This information is provided to assist you in understanding the coverage we offer and does not modify the terms and conditions of any insurance policy, nor does it imply that any claim is covered. Coverages are subject to underwriting and may not be available in all states.