Consulting Company Insurance Overview
Description of operations: Consultants offer a wide range of advice and services for just about any type of industry or operation. Consultants specialize in a particular area of expertise. They normally are considered “independent contractors”. One of the most common services that a consultant provides is research and information on a topic or in a specific subject. At times, the consultant will work out of the client’s place of business in order to provide immediate responses and information. Due to the varied areas of knowledge or expertise needed by a consultant, the background, education, certification, experience, and professionalism of the consultant are items to consider.
Consulting Company Insurance Coverages to Consider
Consulting Company Insurance / Exposure – Property: Property exposure is typically minimal as many consulting firms have virtual officers, use shared space or have work from home arrangements. However some companies may own buildings, office furnishings and computer equipment, but their main property exposure typically comes from losing papers or data. Special extensions need to be added to the typical property insurance policy to ensure data is insured correctly and privacy breach/cyber liability insurance policies should be considered as well.
Consulting Company Insurance / Exposure – Crime: Many clients that have consultants on site require them to carry crime insurance. The specific exposure that clients of consulting companies would be concerned about is theft of their assets. This exposure is insurable under a consulting company insurance policies provided the appropriate extension is added. All employees of consulting companies should undergo thorough background checks, and there should be a policy and procedure manual explaining expectations when employees are off-site.
Consulting Company Insurance /Exposure – General Liability Insurance: The potential of a consultant causing bodily injury and or property damage to a third party is a real exposure for any consultant who is interacting with clients. In addition, the typical commercial general liability insurance policy provides libel or slander coverage, non-owned auto coverage (key for consultants using their personal vehicles while on business) and tenants legal liability coverage should they be renting physical space from others.
Consulting Company Insurance /Exposure – Professional liability Insurance / Errors & Omissions (E&O): The main exposure consulting company insurance programs need to cover is the risk of being sued by a client. Professional liability insurance for consultants covers defense costs and/or settlements or judgments brought against them which allege a financial loss was suffered as a result of service and or advice they provided for compensation. Professional liability insurance /errors and omissions (E&O) insurance is the insurance coverage that needs to be included in almost every consulting company insurance program.
Consulting Company Insurance /Exposure- Commercial Automobile(s): – Automobile exposure for consultants is primarily hired / non-owned and some rental usage due to the fact that many consultants use their personal vehicles (which aren’t registered in the company name, therefore, making them non-owned from a corporate perspective) and or rent a vehicle to travel to and from client locations. If vehicles are supplied to employees by the employer, there should be clear guidelines, especially regarding personal and permitted use of the vehicle, and the consulting company insurance program will have a master commercial auto insurance policy included in it.