Professional Liability for Consultants
Consulting is quickly becoming one of the fastest growing industries in America. As big businesses have continued to grow, only strengthening the advantage they have over smaller businesses, entrepreneurs and business owners are doing everything they can to outwit not just their giant competitors, but other smaller and startup companies looking to accomplish the same thing they are, success.
More and more of these businesses are turning to consultants to help them with this daunting task. Growing a business isn’t easy to begin with but when you add all the different ways you can do this into the equation, it can get overwhelming fast. It’s never a bad idea to bring in a fresh set of eyes, someone who not only has different ideas but, hopefully, has a proven track record of helping businesses grow and become more successful.
Consulting is something many people can do without giving up their day jobs, or at least without it impacting their careers too much. Because it’s something many people do on the side or during their free time, it can be easy to not think of it as owning a business but more as a hobby. This mindset can be costly when it comes to making sure every aspect of their business has been addressed.
The aspect we’d like to touch on today is insurance. When compared with typical businesses, consultants don’t have much risk to worry about. They rarely have an office space because they travel to their clients’ locations. They’re not selling a product which means they don’t have to worry about any product liability either. Consultants often work alone as well which means that they don’t have any workers compensation insurance exposures to worry about.
So what kind of insurance do consultants need? Professional liability. Let’s say you’re a consultant and have been hired by a business owner to help them grow their business. You spend some time with them, give them some advice and tips and send them on their way. Well what happens if that business doesn’t grow and the business owner decides to sue you for bad advice? They allege the bad advice led to financial loss.
Regardless of whether the suit holds up in court, you’re still required to go through the legal proceedings until a verdict is reached. This can add up to thousands of dollars in legal fees just to find out if you’re going to be held accountable, then if you are held accountable you’re responsible for paying back the money you were paid as a consultant plus any damages related to the suit.
We found an article that outlines such a case here. Now we know that most consultants are getting million-dollar contracts but that’s beside the point, the point is that no one can guarantee anything, even if you’ve been a consultant for 20 years there’s no guarantee that your advice is going to pay off for your clients. As we all know, more and more people turn to litigation when business dealings go sour and legal fees are only getting more expensive each year.
A professional liability policy can help you in this situation. It’s not going to keep you from getting sued but what it can do is protect you and shield you from legal fees, the time expended by going to court and damages awarded by a judge if you’re found to be at fault for a loss.
These policies are relatively cheap depending on the type of consulting you’re doing, and it rarely takes more than 20 to 30 minutes to complete an application. We insure all kinds of consultants throughout the Pacific Northwest and would love to help you find the right policy for your needs. Give us a call today to get a no cost and obligation free proposal in minutes.
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