Management consultants provide important services that can help businesses improve their performance and operations. However, while you’re advising others towards success, you should think about your own success too.
You’ve built a business on your knowledge and expertise, but are you protecting it? Management consultants face a number of liability risks due to the nature of their work that Errors and Omissions insurance helps shield you against. Let’s take a closer look at this essential form of coverage and how it can help protect management consultants.
What is Errors and Omissions insurance for consultants?
Also known as Professional Liability insurance, Errors and Omissions (E&O) insurance is an essential policy that protects you and your company in case of a lawsuit due to alleged professional wrongdoing. Consultant E&O insurance covers a range of liability claims connected to the work you do. This includes mistakes or omissions, as well as more serious allegations of negligence or breaches of contract.
Management consultants offer their clients a professional service by providing expert knowledge and advice. If a client is unhappy with the work you provided or allege that your advice cause them to lose money, they could seek compensation through a lawsuit. Without Errors and Omissions insurance, that expense (plus the resulting court costs) would fall on your shoulders.
Do management consultants need E&O insurance?
Mistakes happen. Even if you work carefully, there’s still a chance that a small error or innocent omission could affect a client’s project. Unfortunately, even the smallest mistakes can have a big impact that ends up costing you.
If a client alleges that your work has caused them a financial loss, you could be facing an expensive lawsuit. This could be financially devastating, potentially leading to bankruptcy or business closure, and possibly draining your personal bank accounts as well as business ones.
But what if a client makes a baseless claim against you? Allegations of negligence—even if they are false—can still be expensive and cause damage to your professional reputation. Thankfully, E&O business insurance protects management consultants even if the claims made against them are without merit.
Is E&O insurance required for management consultants?
Errors and Omissions insurance is not legally required for management consultants. However, your clients may expect you to have a policy. E&O insurance can provide them with peace of mind knowing that if something goes wrong, you’ll be able to compensate them. It also send the signal that you take your professional reputation seriously and are prepared to defend it, if necessary.
What does consultant E&O insurance cover?
Errors and Omissions insurance provides important forms of coverage for management consultants. This includes paying attorney fees, court costs, settlements and judgements that arise from claims including:
- Mistakes, errors, and omissions in your work
- Missed deadlines
- Undelivered services
- Breaches of contract
As already mentioned, consultant E&O insurance policies provide coverage even if you are not at fault. It can also protect employees who perform professional services for your clients.
How much does consultant E&O insurance cost?
Every management consultant and their small business is unique, and the amount you pay for Errors and Omissions insurance may be different from other consultants also working in your industry or state. Getting quotes from multiple insurers is a good way to understand how much you can expect to pay for a policy.
The cost of consultant E&O insurance varies depending on the size of your business and where you work, along with other factors. These may include:
- The industry you work within
- Your history of claims
- Your risk management processes
- The amount of insurance coverage you need or want
Protect yourself with consultant E&O insurance
As a management consultant, you face many risks in the course of your work that an Errors and Omissions insurance policy can help shield you and your business against. And now busy consultants can quickly and easily find, compare, and buy E&O business insurance online and in minutes.
BizInsure is proud to help management consultants save time and money on the insurance they need. Compare policies from top-rated insurance companies, buy online, and receive your policy documents instantly. Protect your small business and get back to work with BizInsure!
Learn more about consultants E&O insurance.