As a consultant, your job is to help companies or people by providing expertise, recommending solutions, assessing weaknesses, assisting in decision making, and overall providing sound advice regarding a course of action. But did you know that without proper business consultant insurance you can be putting your business and self at risk? Three types of consultant insurance you should be looking into are Errors and Omissions, General Liability, and Commercial Auto.
Errors and Omissions
Errors and Omissions (E&O) insurance, also referred to as professional liability insurance, is a type of liability insurance designed to protect individuals who provide professional advice or services. From a consultant’s standpoint, errors and omissions insurance protects the small business consultant from negligent errors, omissions, or even failure to perform duties that resulted in a financial loss to a client. In essence, it protects you from giving the wrong advice or failing to give adequate advice. It shields the consultant against hefty legal costs of defending against a client’s negligence claim, costs associated with lives lost, or property damages as a result of an error or omission.
Let’s say you are an IT consultant who designed a client’s customer database. However, shortly after the database went live, a bug prevented the database from being accessed. The client then decided to sue you for the amount of daily sales lost as a result of not being able to access their customer information. In a worst case scenario, such lawsuit could bankrupt a consultant who doesn’t have insurance. However, professional liability consultant insurance could cover at least the amount of the suit, in addition to legal defense and court cost fees.
General Liability insurance provides coverage to a consultant in the event of litigation for personal injury or property damage. For instance, if your client claims that you or one of your employees damaged their property or caused them physical injury, you could face a costly settlement or lawsuit. General liability pays for these kinds of claims, including legal defense costs. While you may think you’re are at relatively low risk for these types of general liability claims as a consultant, don’t be surprised if your client requires it or has a clause in your contract calling for it.
As an add-on to your general liability policy, consider a Hired or Non-Owned auto endorsement, which will cover damages to a third party should you cause an accident or injure another person while driving a “non-owned” or rented vehicle for business purposes.
Here are a few examples where a hired or non-owned auto endorsement would protect you:
If you use a vehicle in your consulting business, you’re putting yourself, your livelihood, and your business at risk if you don’t have commercial auto insurance. Whether you use your vehicle to transport equipment, products, or simply to provide transportation for you or your employees to a client’s premises, commercial automobile insurance protects your consulting business from various risks associated with owning and operating vehicles for business purposes. Such risks include having an uninsured driver hit your company vehicle, hail damage, vandalism damage, or accident as a result of weather conditions or a traffic mishap. In many states, commercial automobile insurance is mandatory.
Whether your consulting business is marketing, management, information technology, or some specialized practice, consultant insurance helps take the worry out of the unexpected. It lets you do what you do best: strengthen your clients with your expertise, know-how, and advice.
To make sure you have the proper consultant insurance coverage for your consulting business, talk to a BOLT licensed insurance agent today.
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