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Professional liability insurance for consultants offers protection in the case of lawsuits arising from the professional services they provide. Insurance for consultants should also include a Business Owner’s Policy to cover general liability and property damage. Annual costs of a professional liability policy are $1,367 on average, while a BOP costs around $853 per year.
The Hartford is a very well-established company that offers insurance professional liability insurance specifically designed to meet the needs of consultants and small business owners. If you want a policy that will insure you against professional liability and bundle coverage as needed, you should definitely consider The Hartford. Visit their website today to get a quote in minutes.
How Professional Liability Insurance for Consultants Works
Because consultants need insurance for a variety of potential losses, there isn’t just one professional liability insurance policy for consultants to buy. Instead, consultants should purchase coverage to protect against the most likely potential sources of loss. Grouping policies from one business insurance provider is often the most affordable way to get insured.
A Business Owner’s Policy groups two of the most important types of coverage: commercial general liability insurance and property damage. Bundling these coverages in a BOP provides cost savings and essential protection from common sources of loss, such as someone slipping during a consultation or office space being damaged in a fire.
Top Providers of Insurance for Consultants
| Provider |
|
|---|---|
| The Hartford | Easily determining the type of coverage you need and getting a bundled policy |
| Insureon | Obtaining quotes from multiple carriers with one quick and simple application |
| CoverWallet | Convenient and timely access to insurance certifications |
| Allstate | Personalized help from agents that are small business owners |
| Hiscox | Immediate coverage from a top-rated insurer |
The Hartford
If you want to make the process of buying bundled coverage as easy as possible, The Hartford is your best choice. The Hartford asks a few simple questions in plain language to help you find a customized policy. There are endorsements suggested for your industry, and you can get covered without hours of research.
Insureon
Insureon is the best choice to shop among different carriers without filling out multiple applications. Insureon has a simple application to complete in just 15 minutes to obtain many quotes. After quotes come in, an agent with experience will guide you through the purchase of a policy from an A-rated carrier that’s right for you.
CoverWallet
CoverWallet is the place to shop when time is of the essence. It’s possible to get a quote on coverage within minutes. Agents are available 24/7 to help you make your decision. And, once you’ve chosen, you can buy your policy and obtain an insurance certificate right away so you’ll have proof of coverage.
Allstate
If you want an agent who’s a small business owner, turn to Allstate for consultant insurance. Because Allstate agents own their own companies, they have insider knowledge into coverage needs. The perspective they provide is different than a typical agent, and agents offer the most comprehensive guidance for consultants uncertain about the policies they require.
Hiscox
Hiscox is a top choice for insurance buyers looking for flexible payment options, worldwide coverage for losses, and immediate defense on liability policies when you report a covered claim. You can speak with an agent or get a quote online, and can obtain coverage immediately.
Next Insurance
Next Insurance is another insurer that you may want to consider for professional liability insurance. Next also offers policies that are custom designed to meet the specific needs of individual consultants and small business owners. Visit Next Insurance to get more information or obtain a quote in minutes.
Types of Professional Liability Insurance for Consultants
Consultants need a Business Owner’s Policy because any business is at risk of being sued for injury or property damage, or of having their own property damaged. General liability coverage that’s part of a BOP won’t cover lawsuits arising from professional errors, so professional liability insurance for consultants should be purchased too.
Consultants also need coverage in case of a cyberattack, as many consultants store sensitive client files digitally and could be sued for a data breach. And, consultants who require costly equipment need inland marine coverage to supplement standard property loss protections under a Business Owner’s Policy.
Most Common Types of Insurance for Consultants
| Type of Insurance | What It Covers |
|---|---|
| Business Owner’s Policy | Lawsuits and damage to the consultant’s property |
| Professional Liability Insurance | Lawsuits arising from professional advice |
| Cyber Insurance | Damages arising from a cyberattack or data breach |
| Inland Marine Coverage | Property damage not covered by a BOP |
Business Owner’s Policy
Two of the most important coverages available are grouped in a Business Owner’s Policy for convenience and cost efficiency. These policies include coverage in case a consultant is accused of causing harm through some means other than professional misconduct. Here’s what each of these important policies do:
- General liability insurance protects against lawsuits that arise from injury or property damage, such as a lawsuit if a client visits and slips on the office stairs.
- Property damage coverage protects the consultants if something happens to their own property, such as a break-in at the office that results in the loss of computers.
Professional Liability Insurance
Consultants are obligated to provide knowledgeable advice. When they don’t, they can be sued for malpractice. A business consultant who gave inaccurate advice on the financial issues involved in a merger could be sued if the company lost money due to reliance on their advice. Professional liability insurance, also called errors & omissions coverage, covers defense costs and settlements for lawsuits arising from any professional failures.
Cyber Insurance
Cyber insurance provides coverage in the event of a data breach or cyberattack. The FTC reports breaches typically cost under $200,000, but losses can be substantial. A cyber insurance policy covers crisis response costs and lawsuits after a computer hack reveals confidential client information was stolen. It also covers costs to restore networks and data after a breach occurred.
Inland Marine Coverage
In some cases, consultants have expensive equipment, such as high-tech computers. Consultants may travel with this equipment to serve different clients. Property damage policies often provide only limited coverage for vandalism, theft, damage, or other losses that occur offsite of the normal work environment. Inland marine coverage ensures equipment is protected by covering losses that occur off-site.
Professional Liability Insurance for Consultants Costs
Because consultants require multiple policies, premium costs are based on the types of the coverage needed. Typical annual costs for a business owner’s policy would run $854 for $1 million in coverage, while costs of professional liability insurance for consultants are typically around $1,367 for $2 million in protection. Inland marine coverage could add another $2,500 to annual insurance expenses, with policy limits determined by equipment costs.
Insurance for Consultants Costs & Deductible
| Insurance Type | Average Premium Cost | Deductible |
|---|---|---|
| Business Owner’s Policy | $854 | $1,000 |
| Professional Liability Insurance | $1,367 | $1,000 |
| Cyber Insurance | $1,000-$7,500 | $5,000 |
| Inland Marine Coverage | $2,500 | $0 |
Many different factors affect the cost of policies including:
- The type of consulting work: Malpractice claims are more common in certain industries, including the legal and financial industries. A consultant in an industry with a high risk of malpractice allegations faces higher premium costs for consultant’s professional liability insurance than a consultant specializing in providing software training where the risk of loss is minimal.
- The consultant’s experience: Professionals with a long and distinguished track record free from allegations of professional wrongdoing will have lower premium costs than a consultant who’s new to the business or who has had past claims.
- Equipment costs: Consultants with highly specialized and costly equipment face higher premium costs for inland marine coverage than consultants who own little valuable property they transport off-site.
Tips on Getting Insurance for Consultants
Consultants need to know the nuances of professional liability policies to ensure they’re fully covered. It’s also important to start shopping for coverage before doing business and to read policy language carefully to ensure comprehensive coverage. These tips can help consultants to obtain the insurance they need to protect themselves.
Request Coverage for Full Prior Acts When Buying Your First Policy
If you have not had coverage in the past but have already performed consulting work, it’s important your policy cover past actions that could make you vulnerable to a lawsuit.
“If securing coverage for the first time, requesting coverage for full prior acts will allow coverage to apply for errors or issues that aren’t known and that may have occurred prior to obtaining the policy,” advised Michael S. Perry, Vice President, CBIZ Inc.
“If securing coverage for the first time, requesting coverage for full prior acts will allow coverage to apply for errors or issues that aren’t known and that may have occurred prior to obtaining the policy,” advised Michael S. Perry, Vice President, Provide References Attesting to Your Skills
Insurers want to know the risks of a claim against you, so evidence you provide to demonstrate the breadth of your credentials and scope of your knowledge will keep policy costs down.
“Experience, character and capacity do the work,” when shopping for affordable coverage, according to Perry. He advised providing detailed resumes and references to put an insurer’s mind at ease about your competence.
Be Sure to Get All the Required Coverage
Finally, consultants need to understand legal requirements for coverage. For example, while many consultants work independently, they may still be required to buy workers’ compensation insurance, even if they’re the only employee.
Capell also stressed the importance of a professional liability policy. “A professional liability policy can cover legal costs and time spent defending your business in the event you’re sued for your actions or the actions of your business.”
With the National Center for State Courts reporting the median cost of defending a malpractice lawsuit is $122,000, comprehensive professional liability protection is imperative. Read policies carefully and check your state’s Division of Workers’ Compensation to find out what mandates for coverage are in place where you live.
Insurance for Consultants Frequently Asked Questions (FAQ)
For consultants, getting the right coverage can be a daunting prospect. If you have questions about shopping for coverage, our forum is a great place to get answers. You can also read on to find out some answers to frequently asked questions here.
Some of the most frequently asked questions about insurance for consultants are:
Do consultants in different industries need different types of coverage?
While all consultants benefit from a business owner’s policy, not all consultants need inland marine coverage. If you don’t transport equipment, this wouldn’t be necessary. The specific type of consulting you do also impacts the policies you require. A consultant focused on advertising might need media liability insurance, whereas a financial consultant wouldn’t.
What does professional liability insurance for consultants cover if you’re sued?
If you’re sued, a professional liability policy covers defense costs, including investigations into allegations. The policy pays out compensation to the plaintiff in the event the court awards damages or provides funds to settle out of court if a settlement is reached. The policy also provides coverage for disputes resolved in other ways, such as arbitration.
Are you covered for incidents that occurred while you had the policy even if claims aren’t made until the policy has been canceled?
Some policies provide coverage for any claims arising out of incidents while your policy was in effect, even if you no longer have insurance at the time a claim is made. Other policies, called claims-reported policies, provide coverage only if the incident occurred while you were insured and a claim was made and reported to your insurer. If you have a claims reported policy, you may wish to purchase an extended reporting period endorsement so you will still be able to report claims against you and get covered even after canceling your policy.
Bottom Line
Consultants need a business owner’s policy, professional liability insurance, and other policies based on the specific risks they need to address, such as malpractice claims and accusations of wrongdoing. Consultants should obtain coverage before they do business to protect against potential loss and should ensure policies they obtain to cover all potential damage to property as well as legal liability. Bundling insurance from one business insurance provider is often the most affordable way to get covered.
If you want the right amount of insurance for the right price, The Hartford is a great option. The Hartford offers professional liability insurance that is ideal for small business owners and consultants. Using The Hartford, business owners can also bundle policies and combine coverage to meet their specific needs.
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November 12, 2018 at 08:55PM
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