Professional Liability for Consultants

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How does Professional Liability insurance protect consultants?

Professional liability insurance is designed to protect your business if a client is dissatisfied with your work or if you make a consulting mistake — even if you are not at fault. This type of coverage is typically bundled with general liability insurance to provide fuller coverage for a variety of possible business risks.

With professional liability insurance, consultants can avoid having to pay unexpected costs out of pocket if a business disagreement occurs. For example, this insurance would provide coverage if a client claims that a business consultant’s marketing advice led to a drop in sales, or if an education consultant’s proposed curriculum doesn’t include key standardized testing skills.

business insurance for consultants

What does Professional Liability cover for consultants?

Consultant professional liability insurance helps to cover expenses which may arise from a professional mistake or a business disagreement.

If you make an error in your consulting services, it could potentially cost your client a lot of money. Should they decide to take legal action, your professional liability insurance can help to cover the costs.

Even if you didn’t make a mistake in your work, the client might not be happy with the services you provided. For example, they could claim that you didn’t complete the job according to the terms of your contract. Fortunately, professional liability insurance can help if you need to defend yourself in court.

Professional liability insurance for consultants can assist in covering a variety of costs related to:

  • Professional negligence (actual or alleged)
  • Legal defense costs
  • Legal judgments

Learn more about what professional liability insurance covers.

Why do consultants need Professional Liability insurance?

Consultants work closely with their clients, and their guidance can have a major impact on a company’s success. If you make a mistake in this line of work, the financial damages can be significant, and the client may decide to sue you as a result.

The nature of consulting work also comes with the risk of business disagreements. If a client is unhappy with your work, or if they think their business challenges have resulted from your consulting services, there’s a chance that you could face a lawsuit.

In these situations, professional liability insurance offers the financial support and peace of mind that consultants need. When you have this type of coverage, you can focus on your work without worrying about the financial stability of your business.

Some clients also require that any consultants they work with have professional liability insurance. You may need to supply a certificate of insurance that demonstrates your financial coverage in the event of a lawsuit.

What are some common risks faced by consultants?

Consultants insurance offers you protection from a wide range of unexpected events and accidents. Here are some of the common risks consultants could be exposed to at work:

Business mistakes

Consulting requires a lot of diligent research and attention to detail. However, even experienced consultants can make a mistake from time to time.

For example, you could be held responsible if the software you recommend as an IT consultant results in a security breach. If the client decides to sue you, IT consultant professional liability insurance can help cover the costs up to your policy limits.

Accusations of professional negligence

There are typically a lot of moving parts in any given consulting project. If the client thinks that you didn’t provide all of the promised services, they could sue you for negligence.

After acting as a consultant for a textbook publisher, for example, the client claims that you forgot to include an important part of the curriculum. The publisher has to reprint the textbooks, and they sue you for the costs. In this situation, professional liability insurance for educational consultants can help you defend yourself.

How much does Professional Liability insurance cost for a consultant?

NEXT creates customized professional liability insurance policies to make sure you don’t have to overpay for excessive coverage that you don’t need.

Across all industries, professional liability costs average around $26 to $45 per month for 40% of NEXT customers. The professional liability insurance cost for consultants falls toward the lower end of this range due to the limited risks in this industry. The median consultant professional liability insurance cost is just $39 per month.**

A number of factors can affect the total monthly premiums for your consulting professional liability insurance, such as:

  • How many employees you have
  • How high you set your limit
  • Your work experience
  • Your claims history
  • The state where you work

NEXT offers tailored business insurance for consultants

NEXT offers affordable insurance for consulting businesses and self-employed consultants, including professional indemnity insurance for health and safety consultants, management consultants, HR consultants, and more. It only takes a few minutes to get the coverage you need, and you can do everything from your computer or mobile device.

Go to to get started. After comparing insurance options, you can instantly purchase coverage and get a certificate of insurance.

Get a quote online today.

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Let’s find the coverage you need for your business
Business insurance is divided into different policies. We offer seven types so it's easy to design the coverage that fits your business.
General Liability insurance
General Liability
Protect yourself from accidents that cause physical injury or damaged property.
Professional Liability or Error and Omissions Insurance
Professional Liability/E&O
Shield yourself from lawsuits that claim your work errors caused financial losses.
Workers' Compensation Insurance
Workers’ Compensation
Cover medical bills and lost wages if your employees have an accident at work.
Commercial Auto Insurance
Commercial Auto
Stay on the road with coverage for dents, tows and damage to someone else’s vehicle.
Tools & Equipment Insurance
Tools & Equipment
Upgrade your general liability coverage to protect any gear that’s stolen, damaged or lost.
Commercial Property Insurance
Commercial Property
Keep your building, inventory and equipment protected from fire or water damage.
Business Owner’s Policy Insurance
Business Owner’s Policy
Combine general liability and commercial property into one policy to protect your business.
* To the extent permitted by law, applicants are individually underwritten, not all applicants may qualify. Individual rates and savings vary and are subject to change. Discounts and savings are available where state laws and regulations allow, and may vary by state. Certain discounts apply to specific coverages only.
**The cost data presented here are based on NEXT active customers data obtained over the previous 12 months. The cost data presented here are based on the minimum price of professional liability insurance for consulting businesses operating in Texas. These data should not be considered a substitute for obtaining a quote specific to your business. These data were updated in July 2022.
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Issuance of coverage is subject to underwriting. Not available in all states. Please see the policy for full terms, conditions and exclusions. Coverage examples are for illustrative purposes only. Your policy documents govern, terms and exclusions apply. Coverage is dependent on actual facts and circumstances giving rise to a claim. Next Insurance, Inc. and/or its affiliates is an insurance agency licensed to sell certain insurance products and may receive compensation from insurance companies for such sales. Policy obligations are the sole responsibility of the issuing insurance company. Refer to Legal Notices section for additional information.

Any starting prices or premiums represented before an actual customer quote are not guaranteed and are representations of existing premiums of active policies as of December 6, 2023. To the extent permitted by law, applicants are individually underwritten, not all applicants may qualify. Individual rates and savings vary and are subject to change. Discounts and savings are available where state laws and regulations allow, and may vary by state. Certain discounts apply to specific coverages only.