What type of consultant insurance do you need?
The type of work you do — and how you interact with clients — can shape your business risk level and the kind of insurance coverage you need.
For example:
To learn what kind of coverage fits your consulting business, ask yourself these six questions:
- What services do I provide, and what could go wrong?
- Do I handle sensitive client data or financial information?
- Could a client claim that my advice caused them a financial loss?
- Do I work remotely, on-site with clients or from an office?
- Do clients ask for proof of insurance in contracts?
- Am I working solo, or will I bring on subcontractors or employees?.
What’s the best consultant business insurance for your business?
What type of coverage is more likely to protect you if a client claims your advice caused them to lose money? Which type of consultant business insurance could help if your laptop—filled with sensitive project data or customer data—gets stolen from your office? These types of business insurance are the most sought after by consultants like you:
- Professional liability insurance (also called errors and omissions insurance, or E&O): For claims and allegations of bad advice, professional negligence or missed deadlines that cause a client financial loss
- General liability insurance: For client’s physical injuries or damage to other people’s property
- Commercial property insurance: To help owners and renters protect the physical assets of a business, such as inventory, fixtures, furniture, building structures and other business property
- Commercial auto insurance: If you or your employees use a business vehicle to drive to client sites or transport equipment
Professional Liability insurance
Sometimes referred to as errors and omissions coverage, or E&O insurance, professional liability insurance is designed for those who provide advice, including consultants. It can help protect you if a client claims your professional services caused them financial harm due to a mistake, oversight or missed deadline.
Even if you didn’t make a mistake in your work, the client might not be happy with the services you provided — they might claim you didn’t complete the job according to industry standards. Professional liability insurance can help if you need to defend yourself legally.
Example: A business consultant recommends a new operations model that fails to deliver the expected results. The client blames your guidance and demands compensation. Professional liability insurance could help cover legal costs, including attorney fees, court filings and legal judgments.
📚Learn more about professional liability insurance for consultants.
General Liability insurance
General liability coverage is usually one of the first insurance policies business owners buy because it can help protect against claims of non-employee bodily injuries or property damage caused by you or your employees. For consultants, it’s beneficial if you meet clients in person or rent office space.
Example: A client trips over a rug during a strategy session at your office, injures their wrist and sues for medical costs. General liability insurance can help cover those medical expenses and costs related to defending yourself.
📚Learn more about general liability insurance for consultants.
Commercial Property insurance
Commercial property insurance can help cover the business property you rely on. If gear in your office, like laptops, printers, office furniture, flooring, fixtures or other physical assets are damaged by covered events such as fire, theft or water damage, business property coverage can help.
Example: A fire in the business next door spreads smoke and water damage into your office, destroying your laptop and equipment. Commercial property insurance could help cover the cost to replace what was damaged and keep your business moving.
Commercial Auto insurance
If you drive to client meetings or transport work equipment for your consulting work, personal auto insurance may not cover accidents that happen while you’re on the job. Commercial auto insurance could help cover property damage, medical bills and legal fees if you’re involved in a work-related driving accident.
Example: You’re heading to an on-site workshop when you get rear-ended. Commercial auto insurance can help cover the repair costs and liability.
What other types of insurance could be best for consultants?
Other types of insurance that cover more specific risks could benefit your business, including:
Workers’ Compensation insurance
If you hire employees — even part-time — you may be legally required to carry workers’ comp, depending on your state. It can help cover employee medical expenses and lost wages in the event of a job-related illness or injury.
Unlike general liability insurance, which typically covers injuries to clients or visitors, workers’ comp is designed to help cover injuries to people who work for you.
Example: Your assistant injures their back while moving heavy boxes. Workers’ comp can help cover their medical expenses and pay for their recovery time.
Business Owner’s Policy (BOP insurance)
A Business Owner’s Policy bundles general liability insurance and commercial property insurance. It’s often a good fit for consultants with home offices or leased office space.
It can help cover the cost to repair or replace physical assets your business relies on — like laptops, monitors, printers or office furniture — if they’re damaged by events like fire, theft or a burst water pipe. It can also include business interruption insurance, which may help cover lost income and operating expenses if you have to temporarily shut down for repairs after a covered event.
Example: A pipe bursts in your office suite, damaging your laptop and office setup. A BOP may help cover repairs or replacements for the computer, plumbing system, furniture, flooring and business fixtures.
Cyber insurance
If your work involves managing data, using cloud platforms or communicating online with clients, cyber insurance could be a huge asset. It can help offset the costs of responding to data breaches, cyberattacks or hardware failures caused by malware.
Example: A hacker gains access to an employee’s email and breaches your network security to steal credit card numbers, customer addresses, account information and more. Cyber insurance can help with client notifications, recovery costs and potential legal claims.
How to choose the best consulting insurance provider
Find an insurance provider that fits how you operate your business. Seek out an insurance company that can offer:
- Speed and simplicity. You shouldn’t have to wait for quotes or deal with paperwork to get basic coverage.
- Customized coverage. Your insurance should be tailor-fit for your business — whether you work solo, hire help or specialize in a niche field.
- Instant proof of insurance. Many clients require a certificate of insurance (COI) before they’ll sign a contract with you. Easy access to unlimited COIs can help you keep deals moving.
- Flexible, affordable payments. Look for predictable pricing and monthly payment options that work with your cash flow.
- Coverage that grows with you. As your business evolves, your insurance should be flexible and easy to update 24/7 from anywhere.
NEXT is fully online with customizable business insurance for business owners of any size. Check prices and get covered in about 10 minutes anytime.
