Business Consulting Insurance Policy Information
Business Consulting Insurance. As a business consultant, you are entrusted daily with giving your clientele the advice they need grow their business and boost their profits. However, if the advice you give does not turn out to be what's in the best interests of your client, you can end up facing a lawsuit as a result.
Consultants are generally independent contractors who specialize in a particular area of expertise. Consultants offer a wide range of advice and services for almost any type of industry or operation. One of the most common services provided is research and information on a specific subject. At times, the consultant will work out of the client's place of business to provide immediate responses and information. Due to the varied areas of knowledge or expertise needed by a consultant, their background, education, certification, experience, and professionalism are items to consider.
Protecting yourself with business consulting insurance can give you a wedge of protection against possibilities that are beyond your control. An independent insurance agent can help you determine which types of insurance and how much insurance your consulting business needs.
Business consulting insurance protects your business from lawsuits with rates as low as $37/mo. Get a fast quote and your certificate of insurance now.
- How Much Does Business Consulting Insurance Cost?
- What Do Business Consultants Need Commercial Insurance?
- Do Businesss Consultants Need Professional Liability Insurance (E&O)?
How Much Does Business Consulting Insurance Cost?
The average price of a standard $1,000,000/$2,000,000 General Liability Insurance policy for small business consultants ranges from $27 to $39 per month based on location, industry, payroll, sales and experience.
What Do Business Consultants Need Commercial Insurance?
Business consultants perform a range of duties for their clients. They provide both assistance and advice to other businesses on issues ranging from administrative management, records management and equity and asset management to financial planning and budgeting, office planning, site selection, process improvement, and strategic and organizational planning. Consultants may provide business services such as human resources advice, administrative support, distribution and logistics, operations, and marketing.
As a business consultant, you likely receive requests to find methods for keeping your clients' businesses above board and profitable. Although most of the time your services only lead to improvements for your clients as well as increased profits, if you fail to provide the appropriate service or if you make errors of any type, you may be subjecting yourself to a lawsuit.
You must have a plan in position to protect your consulting business from inherent risks that you face, including property damage, lawsuits, accidents, weather, theft, and other events. With a comprehensive business consulting insurance plan in place, you protect your business should things go awry. Each business is different, so the plan that works for one business is not necessarily the insurance plan that works for all. An insurance agent can help you make that determination.
Basic Insurance Policies for Consulting Businesses
While you are at a low risk as a business consultant for claims of bodily injury or property loss, you still need to worry about protecting your assets if a scenario arises where someone sustains an injury on your business' premises or becomes injured while visiting your office. De commercial general liability policies offer a broad range of coverage against lawsuits that occur due to third-party property damage or bodily injury. Some scenarios that might call for you to have this type of coverage include:
- Slips and falls that occur when a delivery person, vendor or client falls on the property belonging to or controlled by your business
- Your employee or you damage property that belongs to your client
- You face accusations of libel, slander or false advertising
General liability insurance covers the costs associated with paying medical bills, replacing any property that is damaged and paying any legal costs associated with lawsuits or claims against your business. If a settlement is rendered in your case or the court finds against you, any judgement can be paid by your insurance policy, up to the limits of the policy you choose. In addition, a business consulting insurance policy provides protection for your business property, even if the space you lease or the property your business insures is leased. This includes damage by weather, fire, vandalism, theft, and other covered perils. Moreover, your policy can provide coverage for the interruption of your business and the loss of business income. This may include ongoing expenses such as salaries and rent or for the costs of relocating following events such as fire.
Another option is a business owner's policy, also known by its acronym, BOP. This is a bundled package of policies that provide everything a small business needs to be covered completely. BOP policies include property coverage, liability coverage, and coverage for business interruption in a package that is customized for your business needs. In addition, your business may benefit from other types of coverage. A commercial auto policy can cover your business auto from liability caused during the course of operation for your business. Worker's compensation can provide medical coverage and lost wages to any employees who are injured or become ill due to a work-related peril.
Do Businesss Consultants Need Professional Liability Insurance (E&O)?
One of the most important insurance coverage types for the business consultant is a professional liability policy. If you make a negligent mistake that causes negative consequences for your client, then this policy can kick in and pay. This includes suits for professional negligence, errors and omissions, breach of duty, actual or alleged mistakes, and making misleading statements.
A good way to choose a policy is to compare quotes from more than one company. Weighing the differences in policies, including limits and exclusions, can help you find the right level and type of coverage for your particular needs. Work with an independent agent to make the comparison process easier.
Business Consulting Risks & Exposures
Professional liability exposures may be moderate or very significant, depending on the type of consulting work performed.
Workers compensation exposure is often that of an office exposure, although some firms have significant off-site work at clients' premises. Since office work is done on a computer, potential injuries include eyestrain, neck strain, carpal tunnel syndrome, and similar cumulative trauma injuries that can be addressed through ergonomically designed workstations.
Consultants working off site can be injured by slips and falls, falling objects, falls from heights, electrical panels, and wiring, construction machinery, flying debris, noise, and automobile or aviation accidents. Protective equipment may be required.
Premises liability exposure is often limited at the consultant's office due to lack of public access. If clients visit the premises, they must be confined to designated areas. To prevent slips, trips, or falls, all areas accessible to clients must be well maintained with floor covering in good condition. The number of exits must be sufficient, and be well marked, with backup lighting in case of power failure.
Parking lots and sidewalks need to be in good repair with snow and ice removed, and generally level and free of exposure to slips and falls. The off-site exposure could be extensive. All employees should undergo thorough background checks. There should be a policy and procedure manual explaining expectations when employees are off site.
Property exposure is often limited to that of an office, although there may be some incidental storage or an area for meetings. Ignition sources include electrical wiring, heating and air conditioning systems, wear, and overheating of equipment. Storage of papers and materials needed to perform research or other work for clients may increase the fire load. All information should be kept in fireproof cabinets.
Crime exposure is limited to employee dishonesty, particularly of clients' property while the consultant's employee is on the clients' premises. The consultant may have unique access to clients' trade secrets and other confidential information. Hazards increase without proper background checks, along with monitoring procedures and securing of all records to prevent unauthorized access. All job duties, such as ordering, billing and disbursing, should be separate and reconciled on a regular basis. Audits should be performed at least annually.
Inland marine exposures consist of accounts receivable if the consultant offers credit, computers, and valuable papers and records for clients' information and research done by the consultant. There may be specialized equipment transported to the client's location that will need special floater coverage. All information should be duplicated with copies stored off-site. Any books that are used in research should be cataloged in the case of loss or damage.
Commercial auto exposure is primarily limited to hired, non-owned and rental usage. If vehicles are supplied to employees, there should be written procedures in place regarding personal use by employees and their family members. All drivers must have appropriate licenses and acceptable MVRs. Vehicles must be maintained and records kept in a central location.
Commercial Insurance And Business Industry Classification
- SIC CODE: 8742 Management Consulting Services, 8748 Business Consulting, NEC
- NAICS CODE: 541611, 541612, 541613, 541614, 541618, 541620, 541690
- Suggested ISO General Liability Code(s): 41675, 41677, 47367
- Suggested Workers Compensation Code(s): 8803, 8810, 8742
Description for 8742: Management Consulting Services
Division I: Services | Major Group 87: Engineering, Accounting, Research, Management, And Related Services | Industry Group 874: Management And Public Relations Services
8742 Management Consulting Services: Establishments primarily engaged in furnishing operating counsel and assistance to managements of private, nonprofit, and public organizations. These establishments generally perform a variety of activities, such as strategic and organizational planning; financial planning and budgeting; marketing objectives and policies; information systems planning, evaluation and selection; human resource policies and practices planning; and production scheduling and control planning. These establishments are characterized by the breadth and scope of the problems they address.
- Administrative management consultants
- General management consultants
- Human resource consultants
- Management engineering consultants
- Management information systems consultants
- Manufacturing management consultants
- Marketing consultants
- Operations research consultants
- Personnel management consultants, except employment service
- Physical distribution consultants
- Site location consultants
Types Of Small Business Insurance - Requirements & Regulations
Perhaps you have the next great idea for a product or service that you know will appeal to your local area. If you've got a business, you've got risks. Unexpected events and lawsuits can wipe out a business quickly, wasting all the time and money you've invested.
Commercial insurance steps in to help you manage these risks, avoiding a situation which requires you to pay exorbitant costs out-of-pocket.
Insurance is so important to proper business function that both federal governments and state governments require companies to carry certain types. Thus, being properly insured also helps you protect your company by protecting it from government fines and penalties.
Small Business Insurance Information
In the business world, there are many risks faced by company's every day. The best way that business owners can protect themselves from these perils is by carrying the right insurance coverage.
The The National Association of Insurance Commissioners (NAIC) is the U.S. standard-setting and regulatory support organization. Through the NAIC, state insurance regulators establish standards and best practices, conduct peer review, and coordinate their regulatory oversight.
Commercial insurance is particularly important for small business owners, as they stand to lose a lot more. Should a situation arise - a lawsuit, property damage, theft, etc. - small business owners could end up facing serious financial turmoil.
According to the SBA, having the right insurance plan in place can help you avoid major pitfalls. Your business insurance should offer coverage for all of your assets. It should also include liability and casual coverage.
Types Of Small Business Insurance
Choosing the right type of coverage is absolutely vital. You've got plenty of options. Some you'll need. Some you won't. You should know what's available. Once you look over your options you'll need to conduct a thorough risk assessment. As you evaluate each type of insurance, ask yourself:
- What type of business am I running?
- What are common risks associated with this industry?
- Does this type of insurance cover a situation that could feasibly arise during the normal course of doing business?
- Does my state require me to carry this type of insurance?
- Does my lender or do any of my investors require me to carry this type of policy?
A licensed insurance agent or broker in your state can help you determine what kinds of coverages are prudent for your business types. If you find one licensed to sell multiple policies from multiple companies (independent agents) that person can often help you get the best insurance rates, too. Following is some information on some of the most common small business insurance policies:
|Business Insurance Policy Type||What Is Covered?|
|General Liability Insurance||What is covered under commercial general liability insurance? It steps in to pay claims when you lose a lawsuit with an injured customer, employee, or vendor. The injury could be physical, or it could be a financial loss based on advertising practices.|
|Product Liability Insurance||What is covered under product liability insurance? I pays an injured party's settlement or lawsuit claim arising from a defective product. These are usually caused by design defects, manufacturing defects, or a failure to provide adequate warning or instructions as to how to safely use the product.|
|Commercial Property Insurance||What is covered under business property insurance? General liability policies don't cover damages to your business property. That's what commercial property insurance is for. It protects all of the physical parts of your business: your building, your inventory, and your equipment, giving you the funds you need to replace them in the event of a disaster. If you work from home, you might consider a Home Based Business Insurance policy instead.|
|Business Owners Policy (BOP)||What is covered under a business owners policy (BOP)? This is a policy designed for small, low-risk businesses. It simplifies the basic insurance purchase process by combining general liability policies with business income and commercial property insurance.|
|Commercial Auto Insurance||What is covered under business auto insurance? This type of insurance covers automobiles being used for business purposes. This could include a fleet of business-only vehicles or a single company car. In some cases it might cover your car or your employee's car while they're being used for business. These policies have much higher limits, ensuring you can cover your costs if one of these vehicles gets into an accident.|
|Commercial Umbrella Policies||What is covered under commercial umbrella insurance? This type of policy is a sort of "gap" insurance. It covers your liability in the event that a court verdict or settlement exceeds your general liability policy limits.|
|Professional Liability (Errors & Omissions)||What is covered under professional liability insurance? This type of business insurance is also known as malpractice oe E&O. It covers the damages that can arise from major mistakes, especially in high-stakes professions where mistakes can be devastating.|
|Surety Bond||What is covered under surety bonds? Bonding is a contract where one party, the SURETY (who assures the obligee that the principal can perform the task), guarantees the performance of certain obligations of a second party, the PRINCIPAL (the contractor or business who will perform the contractual obligation), to a third party, the OBLIGEE (the project owner who is the recipient of an obligation).|
Who Needs General Liability Insurance? - Virtually every business. A single lawsuit or settlement could bankrupt your business five times over. You might also need this policy to win business. Many companies and government agencies won't do business with your company until you can produce proof that you've obtained one of these policies.
Business Insurance Required by Law
If you have any employees most states will require you to carry worker's compensation and unemployment insurance. Some states require you to insure yourself even if you are the only employee working in the business.
Your insurance agent can help you check applicable state laws so you can bring your business into compliance.
Other Types Of Small Business Insurance
There are dozens of other, more specialized forms of small business insurance capable of covering specific problems and risks. These forms of insurance include:
- Business Interruption Insurance
- Commercial Flood Insurance
- Contractor's Insurance
- Cyber Liability
- Data Breach
- Directors and Officers
- Employment Practices Liability
- Environmental or Pollution Liability
- Management Liability
- Sexual Misconduct Liability
Whether you need any or all of these policies will depend on the results of your risk assessment. For example, you probably don't need an environmental or pollution policy if you're running an IT company out of a leased office, but you would need data breach and cyber liability policies to fully protect your business.
Additional Resources For Professional Services Insurance
Get informed about small business professional services insurance, including Professional liability, aka errors and omissions (E&O insurance), that protects your business against claims that a professional service you provided caused your client financial loss.
- Answering Service
- Attorney Lawyer
- Business Consulting
- Corporate Wellness
- Court Reporter
- Debt Collection Agency
- Detective Agency
- Electrical Engineering
- Environmental Consultant
- Executive, Career & Life Coaching
- Executive Search Firm
- Expert Witness
- Financial Services
- Financial Planner
- HR Consultant
- Mediator - Arbitrator
- Medical Billing
- Music, Drama & Dance Therapy
- Office Machine Repair & Maintenance
- Project Management
- Temporary Staffing
- Tax Preparer
Let's face reality. People today are claims conscious, resulting in a significant share of malpractice lawsuits against professionals.
Liability resulting from the rendering of or the failure to render professional services is excluded in most liability coverage forms. This means that a policy covering a account's or lawyers' office will cover liability arising out of the maintenance or use of the premises, but specifically exclude liability arising out of the rendering of a professional service or the omission of such a service.
In addition to the professions in which actual physical or mental injury may be caused to clients, certain other professions are exposed to claims for malpractice.
Claims may be brought against lawyers, accountants, architects, and similar professional persons for errors or omissions in their professional capacity. Errors & Omissions insurance pays damages that might be awarded to a plaintiff alleging professional negligence.
Professional liability policies are made available to such risks, and these policies provide essentially the same protection as is afforded under the physicians, surgeons or dentists professional liability policy.
Minimum recommended small business insurance coverage: Business Personal Property, Employee Dishonesty, Accounts Receivable, Computers, Valuable Papers and Records, General Liability, Employee Benefits Liability, Professional Liability, Umbrella Liability, Hired and Non-owned Auto Liability & Workers Compensation.
Other commercial insurance policies to consider: Building, Business Income with Extra Expense, Earthquake, Equipment Breakdown, Flood, Computer Fraud, Forgery, Money and Securities, Special Floater, Cyber Liability, Employment-related Practices Liability, Business Auto Liability and Physical Damage and Stop Gap Liability.