NYC Insurance Blog

6 Business Insurance Policies You Need as A Consultant

Consultancy is one of the most rewarding businesses you can ever run, thanks to the freedom and independence it brings. However, like any other business, a consulting business also faces various risks that may jeopardize finances and operations. Such risks include, among others, lawsuits, bodily injuries, professional errors, and data breaches. To protect your business from such risks, ensure you purchase the following insurance policies.

Workers’ Compensation Insurance

Also referred to as workers’ comp, workers’ compensation insurance is a policy that offers protection to injured workers. More specifically, it covers lost wages, rehabilitation costs, funeral expenses, and treatment costs for employees who get injured or fall sick while at work. This protects you, the employer, from possible lawsuits that may emanate from failing to take responsibility for workplace injuries. 

While consultancy may seem like a "safe" profession, injuries can occur at any workplace, depending on the nature of the business. For instance, even if you run an IT consulting business, an employee can trip on an electric cable, fall, and break their arm. 

Without the right workers' compensation insurance coverage, you will have to pay for the resulting costs out of pocket, which obviously sounds terrible. Therefore, regardless of the type of consulting business, you run, ensure you have workers' comp coverage, particularly if you have employees.

Take note that workers’ comp laws vary by state, depending on your state, determines the kind of worker's compensation coverage you'll need. Finding the right coverage can be difficult and sometimes confusing, let us guide you into the right type of coverage.

Business Owner’s Policy (BOP)

This insurance policy protects your business property and shields you against third-party liabilities. It is suitable for small businesses and can be customized to suit each type of business. Business property is at risk of damage due to perils such as fire, theft, vandalism, and natural disasters. Fortunately, the business owner's policy (BOP) covers the cost of repairing or replacing the damaged property up to the limits stipulated in the policy. Some of the properties covered include furniture, computers, and stationery.

Apart from property damage, your business can also face lawsuits and claims in case of third-party bodily injuries or property damage. For example, if a client visiting your premises slides on the staircase, falls, and breaks their spinal cord, they may file a lawsuit against you. In case of such, your business owner policy (BOP) will pay for the resulting costs, including legal costs, treatment expenses, and compensation. 

It is worth noting that without the business owner’s policy (BOP), you have to incur a lot of costs from your pocket, something that can affect business finances. The good news is that you can avoid this by buying the business owner’s policy (BOP). 

Professional Liability Insurance

Intentionally or accidentally, professional mistakes happen all the time, especially in service-based businesses such as consulting firms. For instance, a client may sue you, claiming you gave them bad professional advice that led to substantial financial losses or bodily injuries. When such happens, you may have to pay a lot of money for compensation or legal representation. That's where professional liability insurance comes in handy. 

This policy covers the costs that may result in case of a professional mistake such as negligence or inaccuracy. It is also known as errors and omissions. Considering consulting businesses are more vulnerable to claims of negligence, errors, omissions, and general professional mistakes, it is prudent to have the right professional liability insurance for protection against eventualities. We can go over your business needs and professional liability needs over the phone, give us a call today!

Cyber Liability Insurance

Provided you store clients’ confidential data digitally, you should consider carrying enough cyber liability insurance. This is because cyberattacks have become rampant in the current world, thanks to the increased usage of digital devices. For instance, the covid-19 pandemic caused most activities to move online, which created a loophole for hackers to attack. To give you an idea, during the first quarter of 2020 alone, the rate of phishing increased by a staggering 59%, as per Interpol. 

When cyberattacks happen, many people lose their confidential information to hackers, who, in turn, sell it on the black market for profit. 2020 alone saw at least 1000 data breaches resulting in the exposure of over 150 million records in the U.S., as reported by Statista. Such breaches lead to the loss of confidential data and result in multiple lawsuits, loss of finances, and damage to business reputation. Thankfully, having the right cyber liability insurance means that in case of such, your policy will pay for all the resulting costs, saving you from paying out of pocket.

General Liability Insurance

This insurance policy protects your business against third-party claims that may arise in case of bodily injuries, property damage, or advertising injuries. It is necessary because clients may suffer injuries on your premises even though you run a consulting business. Also, in case you accidentally break an expensive laptop while visiting a client on their premises, this policy will cover the cost of repair or replacement, saving you from paying for it out of pocket.

Final Thoughts

So far, it is worth noting that these insurance policies can significantly save your business finances and ensure smooth operations. Therefore, consult a reputable insurance agent and get proper coverage to protect your business from unforeseen events.Get a Quote today, don't allow yourself to be under insured, or paying too much for not enough coverage!

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