HR Consultant Insurance Policy Information
HR Consultant Insurance. As an HR consultant you are going to work with people of various backgrounds and in different fields of employment. Working as an independent HR consultant comes with many risks, and for this reason requires you invest in an HR consultant insurance policy.
Of course you will want a professional liability policy to protect you from negligence claims from your advice. Further, having general liability will cover for slip and fall accidents, or other incidents which occur in your office.
These policies will pay medical bills and other losses including legal fees, in the event a client or visitor sues you.
HR consultant insurance protects your firm from lawsuits with rates as low as $27/mo. Get a fast quote and your certificate of insurance now.
Below are some answers to commonly asked human resources consultant insurance questions:
- What Is HR Consultant Insurance?
- How Much Does HR Consultant Insurance Cost?
- Why Do HR Consultants Need Insurance?
- What Type Of Insurance Do Human Resources Consultants Need?
- What Does HR Consultant Insurance Cover & Pay For?
What Is HR Consultant Insurance?
HR Consultant Insurance is a type of insurance policy designed specifically for human resource (HR) consultants. It provides coverage for potential legal and financial liabilities that may arise from the services they provide to clients.
This may include errors and omissions coverage, which protects against any unintended mistakes or oversights in the consultant's advice or services. Additionally, HR consultant insurance may also include coverage for discrimination or harassment claims, as well as protection against other types of employment-related claims.
The purpose of this insurance is to protect HR consultants from financial loss due to any legal issues that may arise from their work, allowing them to focus on providing quality services to their clients without worrying about potential legal repercussions.
How Much Does HR Consultant Insurance Cost?
The average price of a standard $1,000,000/$2,000,000 General Liability Insurance policy for small HR consultants ranges from $27 to $49 per month based on location, size, payroll, sales and experience.
Why Do HR Consultants Need Insurance?
There are many threats to your business, your licenses, and your livelihood when working with clients from different backgrounds and industries.
As an human resources consultant, insurance is one way to shield yourself from those threats, and avoid the financial loss which might come from a single lawsuit which is filed against you.
In addition to this, there are certain clients who will require you to purchase HR consultant insurance, so it is something you will have to look into regardless of whether or not you want to spend the money.
What Type Of Insurance Do Human Resources Consultants Need?
In addition to a general liability policy, it is important to consider the additional HR consultant insurance coverages. Some of the important ones are:
Errors and Omissions - Also know as professional liability, this protection will shield you from liability in the event a client sues you for negligence, breach of contract or providing information which may result in financial loss.
In some instances, advice you offer doesn't always equate to financial gains for a client. This form of coverage will protect you from these lawsuits, and others which might stem in a similar fashion, and are common for human resources consultants.
Employment practice liability - Another optional form of coverage you might want to invest in when choosing your HR consultant insurance policy is employment practice liability coverage (EPL or EPLI). With this form of coverage, you are protected from employment based complaints.
In the event you have several employees working on staff, different issues may arise, including an employee suing for wrongful termination, sexual harassment or other workplace related incidents. Illegal discrimination, wrongful termination, and other employee related lawsuits are covered under EPLI.
Workers Compensation - This will cover your business should any of your employees get injured while working on the job. workers comp is required for any non-owner or partner employees.
Cyber Liability - In the event you offer online services or have a website where clients information is stored in a portal, you want to protect fit rom cyber threats and hacking.
Additionally, if clients pay via credit card, or online check, the possibility of a hack, or client's information being stolen, is something you have to consider.
When choosing an insurer for your HR consultant insurance policy, discuss this form of protection if you deal with clients online, or use online resources in any fashion when providing HR related services to your client base.
Business Property - If your office is vandalized, if materials are stolen, or if a major storm causes damage to your office, you need insurance in order to cover these losses, and replace damaged equipment or office furniture.
If you do not have the right HR consultant insurance policy in place, this can end up costing you much more out of pocket than you bargained for as an human resources professional.
With the right coverage in place, you not only have protection from such damage and loss, but also from vandalism, theft, and other targeted attacks to your business.
Commercial Umbrella - If your policy limits aren't high enough, or if you simply want to play it safe, umbrella coverage is an option to consider. It is going to cover excess liability, or claims that go over the underlying general and some other liability limits.
Umbrella coverage is a great way to have higher limits in place, and to ensure you are protected from any and all potential threats which are lingering around your practice, as an human resources consultant working with big or small clients and businesses on a daily basis.
What Does HR Consultant Insurance Cover & Pay For?
HR consultants can be sued for various reasons, often due to allegations of professional negligence, errors, omissions, or breaches of contract. Professional liability insurance, also known as errors and omissions (E&O) insurance, can protect HR consultants in these cases by covering the cost of legal defense, settlements, and judgments. Here are some examples of situations where HR consultants can be sued and how insurance can help:
Wrongful termination advice: An HR consultant advises a client to terminate an employee who later claims wrongful termination. The terminated employee sues the company and the HR consultant. In this case, professional liability insurance can help cover the cost of the HR consultant's legal defense and any damages awarded to the plaintiff.
Discrimination or harassment claims: An HR consultant is sued for failing to properly address or investigate claims of discrimination or harassment in the workplace, resulting in a lawsuit against the company and the consultant. Professional liability insurance can help pay for the HR consultant's legal defense and any settlements or judgments.
Errors in employee classification: An HR consultant may be sued for incorrectly classifying employees as independent contractors, resulting in unpaid overtime, benefits, and tax liabilities for the client. In this situation, E&O insurance can help cover the costs of the consultant's legal defense and any resulting fines, penalties, or damages.
Breach of confidentiality: If an HR consultant is accused of disclosing sensitive employee or company information, they can be sued for breach of confidentiality. Professional liability insurance can help cover the costs associated with defending the lawsuit and any damages awarded to the plaintiff.
Negligent hiring advice: An HR consultant who provides negligent hiring advice, resulting in the employment of an unfit candidate who causes harm or damages to the company or its employees, can be sued for their role in the matter. E&O insurance can help cover the costs of legal defense and any damages awarded to the plaintiff.
Errors in employee benefits administration: If an HR consultant makes mistakes in administering employee benefits, such as failing to enroll eligible employees or improperly calculating benefits, they can be sued for negligence. Professional liability insurance can help pay for the consultant's legal defense and any resulting damages.
In all these cases, professional liability insurance can provide financial protection to HR consultants by covering the costs associated with defending a lawsuit, as well as any settlements or judgments. It is important for HR consultants to have an appropriate level of insurance coverage to mitigate the financial risks associated with their professional services.
Commercial Insurance And Business Industry Classification
- SIC CODE: 8742 Management Consulting Services
- NAICS CODE: 541611 Administrative Management and General Management Consulting Services
- Suggested Workers Compensation Code(s): 8810 Clerical Office Employees NOC
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
HR Consultant Insurance - The Bottom Line
When choosing an insurer and level of coverage to purchase, these are a few optional coverage protections to consider investing in, when you are getting quotes for your HR consultant insurance policy.
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
- Armored Car
- Attorney Lawyer
- Background Music Services
- Business Consulting
- Chemical Engineers
- Civil Engineers
- Claims Adjuster
- Commercial Laundries
- Commodity Broker
- Corporate Wellness
- Court Reporter
- Credit Bureaus
- Debt Collection Agency
- Detective Agency
- Diaper Services
- Electrical Engineering
- Environmental Consultant
- Executive, Career & Life Coaching
- Executive Search Firm
- Expert Witness
- Financial Planner
- Financial Services
- Funeral Directors
- HR Consultant
- Inspection Bureaus
- Insurance Agents & Brokers Insurance
- Mediator - Arbitrator
- Medical Billing
- Music, Drama & Dance Therapy
- Office Machine Repair & Maintenance
- Piano Tuners
- Project Management
- Safety Consultants
- Speakers Bureaus
- Tax Preparer
- Temporary Staffing
- Title Abstractors
- Valet Parking
- Specialty Consultants
- Specialty Service Business
The professional services industry, which includes occupations such as lawyers, doctors, accountants, and architects, often deals with sensitive and complex issues that carry a high risk of liability. These professionals are expected to provide their clients with expert advice and guidance, and any mistakes or oversights can result in significant financial consequences for both the client and the professional. This is where insurance comes into play.
Business insurance provides protection against the financial repercussions of potential mistakes or accidents that may occur while providing professional services. For example, a lawyer may make an error in their legal representation that leads to a financial loss for their client. Without insurance, the lawyer would be personally responsible for covering the cost of this loss. Insurance helps to protect professionals from these types of financial burdens and allows them to focus on providing high-quality services to their clients.
In addition to protecting against financial losses, commercial insurance can also provide legal defense for professionals facing legal action as a result of their work. This can be especially important for professionals in high-stress or high-risk fields, such as doctors or architects, who may be at a higher risk of being sued for professional negligence.
Overall, the professional services industry needs insurance to protect against financial losses and legal action, ensuring that professionals can continue to provide high-quality services to their clients without the added stress and burden of potential financial consequences.
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.