Five Steps to Buying Consultant Business Insurance

July 23, 2021 •
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Consultants have a lot on their plates. Ensuring customer needs are met, keeping the prospect pipeline full, and managing the day-to-day administrative tasks required in the business can quickly fill up the day. However, it’s important not to overlook important details such as purchasing business insurance amidst the busyness.

The right business insurance can help you protect your investment in your consulting company as well as your personal property. To make things easier, here are five simple steps to choosing the right business insurance for your company.

Step One: Start with the Must-Haves

Depending on the state you live in, the clients you serve, the type of consulting you do, and other factors, you may be required to purchase certain types of business insurance.

Most states, for instance, require that small businesses carry workers’ compensation, unemployment, and disability insurance if you have employees. Check with your particular state government for local requirements.

If you are renting an office for your consulting business, your landlord may require that your business holds a general liability policy to protect against financial loss resulting from bodily injury or property damage. If you hold a mortgage for an office building, you may have similar requirements.

In some cases, clients may require professional liability insurance, which will protect you from financial losses related to negligence, errors or omissions that may occur when providing consulting services.

Step Two: Complete a Risk Assessment

Once you’ve determined any business insurance policies that are required by law, landlord, or client, you’ll want to consider what other risks your consulting business may have. Think about what types of accidents, errors, or negligence could potentially damage your business. Check with organizations such as the Small Business Association and the National Federation of Independent Businesses for additional guidance.

Some possible business insurance coverages to consider include:

Professional Liability. As mentioned above, professional liability is a crucial coverage to carry even when it’s not required by your state or clients. Everyone makes mistakes and oversights happen. This type of insurance will also cover you if a client isn’t happy with your work, either due to mishaps in communication or unrealistic expectations on their part.

Home Office. If you run your consulting business out of your home, you may want to consider purchasing a rider to your homeowner’s insurance policy that would cover any business equipment loss or provide liability coverage for third-party injuries that might occur.

Business Interruption. This type of policy would cover losses if your consulting business needed to close temporarily due to fire, storm or other natural disaster.

Cyber Liability. As more data is moved to the internet, this insurance covers a data breach, cyber incident, or related lawsuit. If you store any client info, including credit card numbers or personal information, cyber coverage is a must.

Commercial auto insurance. If you drive for your consulting business, you may want to consider this policy to cover property damage, medical bills, and legal fees if your business vehicle is involved in an accident.

Step Three: Find a Reputable Provider

Many companies provide insurance services, and it’s important to find an agent or provider that

you trust. Ask family, friends and colleagues for recommendations and read third-party reviews. Consider online providers such as NOW Insurance, which works with experienced specialists who have a deep understanding of the insurance that business consultants need.

Shop around and compare several alternatives before making a final decision. Insurance companies vary as far as costs and how flexible they are with limits and deductibles, so be sure to invest the time up front to compare rates, benefits, terms, and packages from several different insurance companies. NOW Insurance makes it easy to compare; you can get a quote online in under three minutes.

Step Four: Select the Right Level of Coverage and Deductible

Remember that the reason you’re purchasing business insurance is to protect your consulting firm from devastating losses. Lawsuits, even if they are won, can be devastating financially solely through legal fees. Be sure you overestimate your needs, so you are securely covered.

Once you determine the level of coverage, you’ll need to balance the deductible levels and the premium payments. Although it can be tempting to select a high deductible to lower your premium costs, be sure that you can comfortably cover that deductible in the case of an incident.

Step Five: Review Coverage Annually

Insurance rates can vary over time and as a result of changing business circumstances. For example, as your consulting company grows, you may need additional coverage. It’s a good idea to review your policy each year to ensure you have adequate coverage and to compare rates against competitive providers.

Be sure to review your policies and understand what types of incidents are covered as well as what is excluded. Consult with a professional to address questions and other concerns.

Fast, Easy, Affordable Consultant Insurance

NOW Insurance has experienced professionals, skilled in understanding the unique insurance needs of business consultants. As a result, we are able to create customized commercial insurance packages that will meet your needs and mitigate risk.

We offer professional liability insurance that will protect you against a lawsuit filed by an unhappy client claiming you have been negligent while performing your consulting services as well as coverage that protects your business against claims for personal injury, property damage or bodily injury. Get a free quote today, and secure coverage without ever speaking with a representative. Of course, if you have questions or need help determining your coverage level we are happy to help! Contact us.