Consulting is a varied role focused on solving problems and offering solutions to clients. The best consultants have a niche area of expertise to offer individuals or entire organizations. While business consulting and management consulting sound broad, they actually focus on specific areas of a company’s structure or day-to-day operations.
Let’s explore the difference between business consulting and management consulting.
What is Business Consulting?
Business consulting focuses on a company’s processes. These are typically areas such as production, building maintenance, or human resources. A business consultant helps companies improve a part (or parts) of how they do business.
Business consultants typically work with businesses when they are starting up or before period of planned growth. They use their technical knowledge and operational expertise is used to tailor advice to each company they work with. Business consultants objectively review their current or proposed systems and provide advice on how to improve them with as little cost to the business as possible.
A business consultant will often work closely with business owners rather than with senior management. Their recommendations center on how to maximize profits while taking into account the market and external variables.
What is Management Consulting?
Management consulting focuses on areas of a business that are harder to quantify. These may include the business’ values, vision, managing growth, or strategic objectives. A management consultant helps companies improve their work culture.
Management consultants may work with a business at any stage of their development, but they are typically brought into assist large companies or ones that are experiencing rapid growth. It is often harder for larger businesses to quickly pivot because they are more complex than small businesses. A management consultant can help businesses implement these changes across the entire organization.
A management consultant will often work closely with senior management, though they may provide training or coaching to other staff within the business. Their recommendations center on helping businesses keep their core values despite big changes or growth and may advise on risk management at the corporate level.
Protecting your consulting business
Regardless of whether you decide to go into business consulting or management consulting, you’ll want to protect your business. There are many forms of insurance that may benefit consultants. Depending on your business’ needs, you may consider:
Professional Liability
As a consultant, you provide advice and recommendations to clients based on your professional expertise. This close working relationship creates unique risks for consultants. An error in your work could cause a financial loss for a client and result in a lawsuit. Professional Liability helps protect you if this type of claim is ever made against you.
Also known as Errors and Omissions (E&O) insurance, this type of policy protects your business against claims of negligence, misrepresentations, or mistakes. Professional Liability claims are typically made by clients who allege some form of financial damage as a result of your services, products or employees.
Professional Liability insurance covers the legal fees associated with a related claim, including paying any settlements or judgements. Importantly, its protections also extend to baseless claims, which can be expensive to fight in court. It also provides coverage for breach of contract, undelivered services, and missed deadlines.
General Liability
Depending on how you work, a General Liability policy may also be important for your business. Also referred to as Commercial General Liability (CGL) or “slip and fall coverage”, this insurance can protect your business against bodily injury or property damage lawsuits from outside parties.
Clients and other members of the public visiting you at your offices or other worksite present a liability risk should they injure themselves. General Liability pays for medical expenses related to third-party injuries that occur on your premises.
Conversely, if you are visiting a client’s office or workplace and damage their property, your General Liability policy will pay any expenses resulting from the damage.
Workers’ Compensation
You will most likely need Workers’ Compensation insurance if you employ others, even if it’s just one other person. Workers’ Compensation insurance provides protection for employers if an employee suffers a work-related illness or injury.
While sole proprietors in many industries do not need Workers’ Compensation insurance, it may still be beneficial to have if you are working alone. These policies cover the costs of medical treatment, but also provide replacement wages while you take time off to recover.
Find business insurance with BizInsure
If you’re looking for Professional Liability or other types of business insurance for consultants, we can help. BizInsure’s easy to use platform lets small business owners find and compare multiple insurance products at the same time, saving you time. Our blend of technology and knowledgeable customer support provides consultants with competitive pricing and assistance throughout the life of your policy.
