/ BLOG

How Much Does Consultant Liability Insurance Cost?

Sep 25, 2018 · 7 minutes to read

Business consultants rejoice over business growth

You have an advanced degree and years of experience. You enjoy having a flexible schedule and meeting new challenges each day. Your clients are pleased with your consulting services and highly recommend you to other business owners. Now that your consulting dream has been realized, don’t waste another minute waiting to buy Liability insurance. After making such a huge emotional and financial investment in your consulting business, buying Liability insurance is really a necessity.

The pricing for Liability insurance is shaped by various factors like industry type, business size (in both payroll and number of staff members), geographic location, policy limits and terms. Each insurance carrier has their own rate tables and assigns pricing based on their distinctive underwriting guidelines. So, your consulting firm will receive liability quotes unique to its own design, as well unique to each insurance company.

A consultant liability insurance policy may vary between $1,000 per year for a single consultant to $3,000 per year for a medium sized consulting firm. After looking at everything a Liability policy can do for you and your business, you will most likely find this cost to be very low.

What Would My Consultant Liability Policy Cost and Why?

It’s normally recommended that a consultant buy both General Liability insurance and Professional Liability insurance. The Professional liability (E&O) insurance is important because your services are based on professional opinion and clients are paying for this advice, the same as a financial planner or insurance agent.

Commercial General Liability insurance basically covers you for everything that isn’t covered under your E&O policy. For example, if a client falls over a loose carpet in your home office and breaks his/her leg.

Policy Type What Policy Covers
Commercial General Liability (CGL) Insurance Will protect your consulting business in the event a client files suit due to bodily injury or property damage.
Professional Liability Insurance (aka Errors & Omission or E&O) Professional (E&O) Liability insurance is meant to protect you if a client files a liability lawsuit specific to how you did not live-up to your professional obligations. Professional (E&O) liability insurance will
safeguard your business against any claims for unintentional mistakes,
inaccurate advice, violations of good faith, and general negligence.

How Does Your Industry Impact Your Cost?

The insurance company is going to review all aspects of your consulting business to determine your level of risk and, therefore, the cost of your premiums. The theory is that the riskier the industry the more likely a civil lawsuit may arise in the future.

For example, an IT consultant that makes a programming error during their client’s IT project may cost the customer $300,000 in damages. On the other hand, a fitness coach that provides insufficient instruction may cause a fitness student $50,000 in medical damages.

Consulting service risks are viewed a bit differently than other types of businesses. This is because consultants have specialities such as human resources, IT, or accounting. The underwriter will evaluate your particular speciality, within the consulting industry, when considering your risk.

It all comes down to the type of services you perform and the financial investment your clients make in those services.

How Do Liability Limits Impact Rates?

If you need homeowners or car insurance that pays more for damages, you will usually have to pay for a higher premium. This is the same concept for Liability insurance. More coverage means a higher premium. In the long run, paying a bit more in premium now may actually save your business millions of dollars someday.

The most common General Liability policy limits are $1 million occurrence / $2 million aggregate. This is how it breaks down:

  • $1 million occurrence limit. The insurance company will pay up to $1 million to cover any single claim.
  • $2 million aggregate limit. The combined total (aggregate) amount that the insurance company will pay for all claims during the policy term is $2 million.

You have the option to select from a range of liability limits. The above figures are simply the most popular. Policy limits make a huge impact on the premium cost of insurance because they determine how much liability coverage the insurance carrier will provide.

Some small business owners like yourself choose liability limits based on the exposures within their particular industries. Other small business owners might select coverage amounts because a client stipulates the amount needed to complete the project. For example, perhaps a large corporation is opening a new office in your area and you want partner with the corporation to help with hiring and training staff. The Request for Proposal (RFP) document clearly states you must hold an active $1,000,000 liability policy to be selected. If you want to be able to work on this amazing project, you will want to be sure to submit a Certificate of Insurance (COI) showing $1,000,000 of in-force liability coverage.

You should also consider the pitfalls of being underinsured. You may select a $300,000 limit thinking that will more than cover any damages you can imagine. Hopefully, that is true. However, if your liability policy doesn’t have enough coverage to pay for all the legal fees and damages stemming from a lawsuit, you will have to come up with the remaining funds on your own. This could mean deducting funds from your company’s business account or even borrowing money from your personal accounts.

Find the best liability limits for your consultant business at BizInsure.

How Do I Save On Liability Insurance?

If your consulting firm hasn’t had any previous claims history or past litigation, you will most likely be able to secure affordable insurance rates right from the start of the coverage. Of course, you’re going to want to keep things that way!

Below are a few tips to help you save on your liability insurance premiums.

Be proactive about managing your risks

This is by far the most significant way to save yourself money and to avoid future lawsuits. Be sure to develop a risk management plan for your business. In fact, the insurance underwriter may ask for some information about your risk management plan. This lets the insurance underwriter know if you are being proactive in avoiding litigation.

If you aren’t already doing these things, you may want to start!

  • Design an orientation for your employees. Keep the training program in writing for future reference. Be sure every new consultant understands and receives the same exact training.
  • Have your attorney review your current contract to determine if it needs to be improved (and how) for liability purposes
  • Consider a waiver for your new clients, depending on the project
  • Keep your home office clean, clutter-free, and organized
  • Be sure to protect your client’s data and any confidential information you have access to as a hired consultant
  • Keeping detailed documentation on file is important in all phases of your work with a client. You want to be sure deadlines and expected outcomes are understood by both parties.

Learn more about Liability insurance for consultants.

Pay your entire premium upfront

Usually, you can pay your premiums monthly or annually. The best option is to pay the entire 12-month premium up-front. This way you may receive a discount for paying in full. Plus, you’ll avoid paying any finance fees that are applied when you pay for the insurance month-to-month.

Bottom Line

Now that you’re working as a consultant, it’s very important to protect your business. Liability insurance is an excellent way to do so. Being a consultant means you may benefit from both a General Liability policy and a Professional (E&O) Liability policy, which the average annual cost is usually a minimum of $1,000 for a Liability insurance plan.

If you think it over, you’ll see a $1,000 premium is minimal in comparison to the coverage and security your liability policy will provide. The coverage limits you may select from usually vary between $1,000,000 and $2,000,000.

In addition to purchasing Liability insurance, you can also minimize your exposure to risks without spending any cash. For example, document all agreed-upon deadlines, project scope, and any other significant information about the work. Small, consistent steps such as these require little time and no money but can save your bottom line thousands of dollars. Liability insurance may not even be on your “to do” list today but it should be.

Get Free Online Quotes and get coverage instantly

The coverage you need for your business.

Business insurance is divided into different policies. We offer 4 types so it's easy to design the coverage that fits your business.

Professional Liability Insurance

Get a quote

General Liability Insurance

Get a quote

Business Owner’s Policy (BOP)

Get a quote

Workers Compensation Insurance

Get a quote

Let's find

The coverage you need for your business

Professional Liability Insurance

Get a quote

General Liability Insurance

Get a quote

Business Owner’s Policy (BOP)

Get a quote

Workers Compensation Insurance

Get a quote

Responsive and professionalCompetitive price. I highly recommend Bizlnsure as an insurance provider
Zynab B.
1710433556
Your service is easy to renew as needed and your company informs the client in advance for renewal.
Henry B.
1710352389
It has been a pleasure doing business with Biz Insure Llc.Their representatives are very courteous, helpful and customer service oriented.
Shonta I.
1710297732
Quick and easy....
Tammy K.
1710172643
I follow the instructions & would prefer to paid every month. I did not have the options to pay every month.
Alamo H.
1709935830
Thank you, Amy, for making my experience enjoyable and funny. Thank you so much for your kindness!!!
George J.
1709840615
I'm pleased with the business quote I received from Bizinsure LLC. Thank You!
Shanda J.
1709586997
Very satisfied with the online experience
Nicole h
1709238653
Been a happy customer for years! Easiest company to receive a quote and get insured. No hassles! Easy payment! Finance plans, if needed!
jodi H.
1709226367
Love it
Hanna R.
1708272180
Every year, BizInsure is my go to for general and professional liability insurance! Thenrates are unbeatable.
Calandra K.
1708044666
The agent was quick and efficient in generating a quote for my needs.
Theresa F.
1707895796
I enjoy working BizInsure they always answer all my questions and make sure i have the correct coverage for my business.
Prompt and professional service from Biz Insure. Thanks Leslie and Liza!
Bev G.
1707524454
Very easy to sign up for insurance.
Great company
Brown G.
1706896003
Fast and efficient!
Kim C.
1706746693
عالی
alireza J.
1706727364
It was great being able to get a policy that suits my company's need in less than 30 minutes. They were vey thorough. Very competitively priced.
Lynette C.
1706621476
I worked with Andrea for another start up business. She was very knowledgeable and help me pick the correct policy. Amazed at how quickly the process went.
Representative was very kind, helpful, and educated me well. I appreciated today's prompt service with confirmation that I was satisfied with what was provided to me.
Tina P.
1706224051
Great company for.your low cost business insurance needs.
constantin T.
1706156911
Staff was very fessional and friendly. I was able to get a quote and move forward within 20 minutes.
Pebbles S.
1706126428
Wonderful
Complete C.
1705788054
MUY BUENO
Super easy process.
Ashley G.
1704830227
It’s very easy to understand and at a very reasonable price.
Mary M.
1703780096
Professionalism, Quality, Responsive and budget friendly
B D
1703029371
Great rates, easy to understand and select appropriate coverage, can get in a jiffy
Brie C.
1702775397
I have been a customer of BizInsure for a few years now and I love it. There customer service is awesome and the prices are affordable.
Danyale W.
1702132165
Quick easy experience! The rep was knowledgeable & pleasant. Customer care was awesome to respond and clarify my concerns.
Kathy Ann A.
1702059151
bizinsurance makes purchasing Business Insurance...SIMPLE!
Andrea W.
1701380391
Great quality of Service ,faster and convenience way to pay at most. Thank you for your Service to my Healthcare Facility .
Quick and easy!!!!
Terry
1701319042
Great service! Easy process and very informative representative. Andrea was great and very patience with our process. I would recommend using them!!
Terrance R.
1700848536
Always and easy process. Thanks!
Gerald S.
1700244544
Renewal was quick and easy online
Angelita K.
1699752900
js_loader
Google Rating
4.7
Based on 254 reviews
×
js_loader