Our Advice: Protect Your Consulting Business with Insurance

Your clients trust your judgment for major decisions in their business, but now it’s our turn to help you. While you focus on the advice and solutions that deliver tangible results for clients, Simply Business’ insurance options can have your back against potentially unforeseen incidents.

Simply Business is an online insurance platform that makes it easy for business owners like you to find personalized, affordable coverage. Our quote process tailors plans to your needs, from comprehensive general liability to professional insurance.

Plus, it takes only a few minutes to get free quotes from the nation’s top insurers.

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Here are three types of business insurance available to management consultants:

• General liability insurance
• Professional liability insurance
• Workers compensation insurance

Each type of policy covers different scenarios, but all insurance offers the benefit that:

• It can protect your business from certain claims.
• It can cover damages caused by your negligence.
• Proof of insurance can help clients feel good about your work.
• It may be legally required where you’re located.

What Types of Management Consultant Insurance Do I Need?

Your days are filled with analysis and problem-solving, which doesn’t leave much time to learn the ins and outs of business insurance. While you may be ready to jump into finding coverage with the same intensity and curiosity as your other projects, the good news is that you don’t necessarily have to. We have the essential information you need to hit the ground running.

Professional Liability Insurance

When you’re in the business of providing advice or guiding a client’s actions, it can be helpful to have professional liability insurance. While you always serve clients to the best of your ability, what happens if you accidentally give bad advice?

Or perhaps even worse, what if you give advice that you believe is sound, but your client views things differently?

Management consultant professional insurance covers you and your business if your client claims that you or your business were negligent. Additionally, if you have people working for you, professional liability insurance can cover your employees, as well.

Here’s how one of these scenarios could play out with or without PL insurance. Imagine you’re consulting with a new client about pivoting their strategy or positioning. You pull in case studies and cite your reasons, and your client trusts your judgment.

Fast forward a year down the road, and the changes a client made based on your advice resulted in a significant financial loss. The client is understandably upset, and they sue you for negligence.

Without professional indemnity insurance, you would have had to pay for all legal fees and settlements out of pocket. However, if you were a management consultant in this scenario who carried insurance coverage, your plan could likely cover claims up to your policy limit. By making a strategic decision to protect your business before you need it, you could protect your business from some potentially devastating bills.

Let’s review. Here’s what management consultant professional indemnity insurance can cover:

• Negligence or alleged negligence
• Legal defense costs
• Omissions or alleged omissions
• Claims and damages
• And more

Keep in mind that professional liability insurance usually doesn’t cover:

• Intentional acts and omissions
• Property damage
• Medical expenses
• Bodily injury
• And more

General Liability Insurance

Sometimes consultants are specialists who favor a particular industry or type of problem. In contrast, others are generalists who go wherever they’re needed. If general liability insurance were a consultant, it would be the latter. This jack-of-all-trades policy can cover bodily injury, accidents, or damages to third parties, such as clients or vendors.

Other than the long hours and pressure to perform, management consulting seems like a relatively safe profession. However, accidents can happen at any time.

If you assume you can just cross that bridge when you come to it, you could be in for a rude awakening. The average claim for property damage or accidents in small businesses is around $30,000, which you’d be responsible for without insurance.

An accident doesn’t have to be catastrophic for it to be an issue, either. Imagine a client is walking through your office one day when they accidentally trip on a loose rug and hurt themselves. They’re hurt pretty badly, so they end up having to go to the emergency room.

The money you’ve been setting aside to upgrade your computer, or rent a new space, or take a much-needed vacation, could then have to go toward those medical bills. If you had management consultant insurance, your policy could typically cover some (or all) of the costs of your client’s medical bills, up to your policy limits.

To recap, here’s what general liability insurance usually can cover:

• Bodily injury to another person
• Third-party property damage
• Personal and advertising injury
• Medical expenses
• And more

Now check out what general liability insurance usually doesn’t cover:

• Damage to your own property
• Professional services
• Workers compensation or injury to your employees
• Damage to your work
• Automobiles while in business use
• Expected or intentional injury or damage
• And more

Workers Compensation Insurance

You’ve dreamed of running your own consulting agency, and now you’re hiring employees. Congratulations — growing your team is an exciting development, but there are some extra precautions you’ll need to take. If you have full-time or part-time employees, it’s likely your state will require you to carry workers compensation insurance. As a starting point, you can check your state laws

here

.

As a business owner, you often act as a mentor for your employees. You also may be legally required to take care of them if they’re sick or injured while working for you. The average work injury cost is about $41,000, with a staggering $170.8 billion in claims filed in 2018 alone, making your monthly premiums worth it.

In general, workers compensation insurance for management consultants can cover:

• Medical payments
• Lost wages
• Rehabilitation expenses
• Death benefits

Why Should I Get Insurance for My Management Consultancy?

Do you run through the pros and cons of different strategies when you’re brainstorming for a client? If you’re doing the same for your decision of whether or not to get business insurance, there are a few things to consider.

First, you may have a legal obligation to carry insurance. Workers comp is a common requirement, and some companies may ask for proof of coverage before renting office space to you. Without insurance, these could represent potential roadblocks.

Now let’s review risk and reward. Hopefully, you’ll never have an accident or negligence claim against your business. However, forty-three percent of small business owners polled reported being threatened with or involved in a civil lawsuit.

Also, take a look at the most common incidents that can befall small business owners, including how much they cost on average:

• Reputational Harm — $50,000
• Client Injury or Damage — $30,000
• Client Slip and Fall — $20,000

Weighing the chances of getting hit with a lawsuit isn’t solely dependent on your actions. You could have a golden track record as a consultant, but one disgruntled client could sue you for negligence. Even if you’re able to prove you didn’t act negligently, there would likely still be legal fees resulting from the lawsuit.

These insurance scenarios aren’t just filled with doom and gloom, though. Carrying management consultant insurance comes with its upsides, too. Showing your certificate of insurance (COI) to clients, vendors, and potential employees can help you earn their trust.

Checking out business insurance is simpler than you may think. Simply answer a few questions about your business, and you can compare free quotes from the nation’s top insurers.

Management Consultant Insurance FAQs

Why Choose Simply Business?

You have a strong business sense. After all, that’s what people pay you for! When you’re so focused on getting results for your clients, you may put your strategy on the back burner. The decision to get coverage for your consultancy is one that protects your investment and hard work.

At Simply Business, we make the big decision to buy insurance as easy as possible. We’re one of the fastest-growing online insurance platforms, and thousands of customers trust us to protect their growing businesses.

So why choose Simply Business?

• We’re fast and affordable. We can’t give you more hours in a day, but we can make sure that getting covered takes as little time as possible.You can find and compare plans in under 10 minutes.

• We’re flexible with coverage. We can help you secure your first certificate of insurance, protect your first employee, or expand to new heights.

• We get your business. Small businesses are the heart and soul of communities, and they deserve to be treated as more than a number. Get the personalized protection you need, when you need it.

We respect the hours you spend researching strategies and supporting clients, so we offer the best coverage options to protect your business.

This content is intended to be used for informational purposes only. It is not intended to provide legal, tax, accounting, investment, or any other form of professional advice.