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Why do management consultants need business insurance?
If your professional services precede a decline in performance, it could be disastrous for your small business. Insurance policies for management consultants provide protection against lawsuits, injuries, and other risks.
Add consulting insurance to your risk management plan
Business insurance is a key part of a consultant's risk management strategy. It helps your business withstand lawsuits, injuries, and other costly incidents.
Our licensed insurance agents will help you find the right property and liability coverage for your business needs.
What types of insurance do management consultants need?
These policies cover the common risks of management consulting services.
Professional liability insurance
This liability insurance policy can help cover legal expenses if a business consultant is sued over an error or poor results. It's also called errors and omissions insurance or E&O.
BEST FOR
- Management consulting errors
- Accusations of negligence
- Advice that leads to financial loss
General liability insurance
This insurance covers basic third-party risks, such as a client injury in your office, or accidental damage to a client's computer. Bundle it with commercial property insurance for savings in a BOP.
BEST FOR
- Third-party bodily injury
- Third-party property damage
- Legal fees from advertising injuries
Business owner’s policy
A business owner’s policy, or BOP, combines general liability coverage with commercial property insurance, typically at a lower rate than if the policies were purchased separately.
BEST FOR
- Customer injuries
- Damaged business property
- Business interruption incidents
Workers’ compensation insurance
Workers’ comp is required in almost every state for management consulting firms with employees. It also protects sole proprietors from medical expenses that health insurance might deny.
BEST FOR
- Employee medical bills
- Disability benefits
- Legal costs
Cyber insurance
Cyber liability insurance helps consulting companies survive data breaches and cyberattacks. It can pay for notification of affected clients, legal defense costs, and more.
BEST FOR
- Data breach investigations
- Notification of affected clients
- Fraud monitoring costs
Commercial auto insurance
Commercial auto insurance covers costs if a management consultant's vehicle is involved in an accident. Most states require this coverage for vehicles owned by a business.
BEST FOR
- Property damage caused by your vehicle
- Auto accident injuries
- Vehicle theft and vandalism
Looking for different coverage? See more policies.
How much does business insurance cost for management consultants?
A management consultant who works alone will pay less for insurance than a small firm.
Several factors will have an impact on insurance costs, including:
- Services offered, such as strategic planning
- Business property and equipment
- Business size and revenue
- Types of business insurance purchased
- Policy limits and deductibles
How do I get management consultancy insurance?
It’s easy to get insurance coverage and fidelity bonds as a management consultant or small consulting firm if you have your business information on hand. Our insurance application will ask for basic facts about your company, such as revenue and number of employees. You can buy a policy online and get a certificate of insurance with Insureon in three easy steps:
- Complete a free online application
- Compare insurance quotes and choose policies
- Pay for your policy and download a certificate
Insureon's licensed agents work with top-rated U.S. insurers to find coverage that fits your consulting business, whether you work independently or hire employees.
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Common questions about insurance for management consultants
Take a look at answers to frequently asked questions (FAQs) about management consultant business insurance and more.
Do I need management consultant business insurance if I'm self-employed?
State laws may not require self-employed, independent consultants to carry insurance, but maintaining the right coverage can help your business fulfill contract terms and be protected from financial risks and liabilities.
Small business owners might be mandated to carry professional liability coverage (sometimes called errors and omissions coverage or E&O insurance) in certain states before you can start up a consulting practice or work at certain facilities.
It's also important to keep in mind your personal auto policies likely won’t cover work-related incidents. This could include a car collision involving a business-owned vehicle. Because of that, you might have to pay hefty medical bills or state penalties for not having commercial auto insurance coverage.
Additionally, carrying a workers’ compensation plan, even if you're a sole proprietor or limited liability company (LLC) with no employees, can financially protect you if you’re unable to work due to an on-the-job injury or illness, as well as cover your medical bills, since your personal health insurance won't pay for on-the-job injuries and illnesses.
Am I required to get a consulting certification or license for my management consulting business?
Consulting businesses of any kind, including education consultants, business consultants, and management consultants, usually must have a license to operate legally in most states.
Depending on your location, you may have to apply for your business license through your city, county, or state government. You may also need to obtain a special permit or industry-specific certification, depending on your state, consulting services, and the clients you work with.
Being a licensed business offers many perks, including:
- Tax compliance
- Credibility
- Financial benefits and credits
Continuing your management consultant education is another great way to showcase your expertise to prospective clients, and help you stand out from the competition.
You should consider the Talent Optimization Certification, which trains you in both hiring and people management, so you can build a healthy and high-performing work environment. It’s a good option for management consultants who are just starting their consulting practice and wish to add to their credentials.
What other insurance policies should management consultants carry?
Management consultants should consider the following types of insurance products as part of their risk management plan against common risks and potential financial losses:
- Hired and non-owned auto (HNOA) insurance offers liability protection for sole proprietors or employees who drive their own vehicle for work, or a leased or rented vehicle.
- Business interruption insurance covers financial losses if your business is forced to close temporarily due to a fire or extreme weather. It can often be added to a business owner's policy (BOP).
- Commercial umbrella insurance handles legal expenses when the limit is reached on another liability policy, such as general liability or commercial auto insurance. Sole proprietors may need this coverage to meet client requirements for higher liability limits.
- Fidelity bonds provide financial reimbursement for your customer, should an employee commit fraud or theft. Unlike and insurance policy, your business would have to repay the bond company.