What is Professional Liability insurance for consultants?
As a consultant, clients seek out your expert advice and professional services, something which you have spent many hard-working hours of education and experience to achieve. That is why Professional Liability insurance (also known as Errors and Omission (E&O) insurance) is vital for consultants, providing protection against claims for financial damages by a client related to your services, actions or recommendations.
Professional Liability insurance covers your business against claims of unintentional negligence, misrepresentation or a mistake, by covering the cost of associated legal, settlement and judgment expenses of a claim, whether you are found liable or not.
A Professional Liability policy is different from General Liability insurance, with the main aim of the policy to protect your business from unintentionally misleading a client. General Liability insurance is designed to protect your business against third party bodily injury or property damage lawsuits from outside parties.
Premium pricing and even the terms of Professional Liability terms can vary between consultancy firms and the different kinds of services they provide. Consultancy businesses which pose a higher risk are going to attract a higher premium and vice versa.
Why do consultants need Professional Liability insurance?
The role of a consultant involves providing professional advice and services to clients on a daily basis, a job that doesn’t come without the potential risk of making an accidental mistake an error. The impact of a lawsuit from a client could have a significant impact on your consultancy firm’s day to day operations, finances and reputation, an added stress you could live without.
Professional Liability insurance is an investment to ensure the survival of your consultancy business in the event a lawsuit was made against you and delivers of peace of mind knowing that you have a financial safeguard in place. It provides your business protection for when it needs it most. Actual or alleged, the legal cost and expense to defend your case could be enough to financially send you out of business for good.
