Insurance for Management Consultants
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Why do management and business consultants need insurance?
Being a management consultant is riskier than you might think. An unhappy client, an innocent mistake, or poor recommendations? They can cost you thousands in legal bills or even end your career.
That’s where management and business consultants insurance can help. The many cover options available to Australian management consultants help protect your bank accounts, business and professional reputation.
Protecting your management consultancy is easy with BizCover. Compare quotes from a range of trusted leading insurers online in minutes and protect your business instantly.
Did you know?
Management consultants working as sole traders are personally responsible for every part of their business. So, if things go wrong, you are legally and financially liable for setting things right.
What types of insurance do management consultants need?
There are several types of insurance that you might consider for your small business consulting firm.
Professional Indemnity insurance*
Professional Indemnity protects you against losses claimed by a third party due to alleged or actual negligence in your professional services or advice. Subject to applicable limits, your Professional Indemnity insurance will meet the associated compensation payable to a third party together with your defence costs (which can include legal costs, investigator costs and expert fees).
Offering strategic management advice is a business consultant’s bread and butter. But it also opens you up to risks. A mistake in your work, misunderstood advice or an unhappy client can lead to an expensive claim or lawsuit for your consultancy. Clearing your name could cost thousands of dollars even if you’re not at fault.
That’s where Professional Indemnity insurance comes in. Your policy can help manage common risks, like document errors, missed deadlines, and negligence claims.
Public Liability Insurance*
Public Liability insurance is designed to provide protection for you and your business in the event a customer, supplier or a member of the public brings a claim against you due to their being injured or sustaining property damage as a result of your negligent business activities.
As a management consultant, meeting clients in person is probably an everyday activity. But what happens if you accidentally damage a client’s property? What if someone slips and injures themselves in your office? It’s up to you to fix things—and the invoice might be steep.
Public Liability helps management consultants handle third-party compensation claims for injuries and property damage.
Business Insurance*
Business Insurance is an insurance package designed to provide cover for your business contents, stock, tools and commercial premises when an insured event occurs (such as fire, storm, theft or even accidental damage). A Business Insurance package can also cover your portable equipment, glass and for loss of revenue due to business interruption in specified circumstances. In addition, cover is available for public liability, tax audit, employment practices and statutory liability risks.
Many business assets—like your laptop and records—are essential to running your small business consulting firm. Replacing them if they were lost, stolen or damaged would be a priority. Business Insurance can help you protect these vital items and others (like electronic equipment and furniture) you use for business purposes.
A Business Insurance package can also be tailored to cover unplanned business interruptions, tax audits, and other events that can cost management consultants an arm and a leg.
Cyber Liability insurance*
Cyber Liability insurance is designed to help protect you from claims and support your profitability in the event of a cyber breach or attack. Costs associated with defending a cyber claim are also covered. Examples of the types of risks Cyber Liability insurance can assist with are unintended loss or release of customer personal information, cyber crime, cyber extortion/ransomware and business interruption due to a cyber event. You also have the option to add cover for Social Engineering, Phishing or Cyber Fraud.
Your consultancy could be a target for cybercriminals for a couple of reasons: One, you store a lot of sensitive information about your clients that can be used to initiate fraud or hack into their systems. And two, hackers often hold small business systems hostage, hoping they’ll pay a ransom just so they can get back to work.
That’s where Cyber Liability comes in. These policies help management consultants cover the costs of a cyberattack or breach. They also have 24-hour response hotlines that give you access to IT experts who can contain damage and help you get back to business faster.
How much does business insurance cost for management consultants?
Unfortunately, there’s no one answer to this question.
Every management consultant is unique, and so is the consultancy they run. The risks you face might be different than the consultant down the block, meaning you’ll likely pay different amounts for your business insurance based on those risks.
Factors that can impact your insurance premiums include:
- The size of your consultancy (annual revenue)
- Number of employees covered by a policy and their qualifications
- The types of insurance you choose
- Your cover limits
- Your claim history
Comparing quotes from more than one insurer can help you understand how much business insurance will cost for your management consultancy.
How do I get management consultancy insurance?
Getting business insurance for your management consultancy should be easy, right? We think so!
BizCover has created a no-dramas insurance experience for consultants. Get instant cover for your business in as little as 10 minutes:
- Compare free quotes from selected leading Australian insurers.
- Choose the cover that fits your consultancy’s needs.
- Buy your cover, and your policy documents will be sent to your email.
Get free management consultants insurance quotes online today and save with BizCover!
FAQs
Management consultants are not required by law to have insurance. However, there may be other reasons why certain policies are necessary for your business.
Some clients may require you to have Professional Indemnity and Public Liability insurance to work with them. Insurance requirements and minimum cover amounts may be written into their business contracts.
If you lease commercial office space, your landlord may require proof of Public Liability insurance to use their premises.
Regardless of whether insurance is mandatory or not, many management consultants choose to be covered. Policies can help shield your finances from expensive claims and lawsuits that could devastate your consultancy.
Both Professional Indemnity and Public Liability insurance are useful for management consultants. These policies help cover everyday risks that consultants may face at work or while running their businesses.
Many management and business consultants run their businesses from a home office. While every consultant’s insurance needs will differ, many work-from-home consultants consider:
- Professional Indemnity – The risks of making a mistake, missing deadlines, or facing a professional negligence claim are typically the same, regardless of where you work.
- Public Liability – If you regularly invite clients into your home office or meet with them in their office, you could face a third-party injury or property damage claim.
- Business Insurance – Many homeowners insurance policies do not cover business activities or assets. Separate cover for your work laptop, electronic equipment, records, and other essential business items may be necessary.
- Cyber Liability – Small businesses are a favourite target of cybercriminals. They often take advantage of poorly secured home routers to gain access to business systems or start ransomware attacks.
It is possible to cover your past consulting work with a current insurance policy.
Professional Indemnity insurance is typically written as a “claims-made” policy. This means that it provides cover for claims that are first notified during the policy period, regardless of when the event occurred (within limits).
Claims-made policies are also subject to a retroactive date. The retroactive date is either the date from which you’ve held uninterrupted cover (even if you’ve switched insurers) or a date from which your insurer agrees to cover you. Incidents that occur before the retroactive date will not be covered.
Recommended reading: Claims-made vs occurrence based insurance
BizCover offers Professional Indemnity policies with levels of cover between $250,000 and $10 million from selected leading Australian insurers.
The amount of cover you choose for your consultancy may depend on several factors, such as:
- Your annual revenue or turnover
- The size of contracts you accept
- Business contract requirements set by your clients
With BizCover, getting proof of your insurance is just as easy as buying a policy! Simply log in to our self-service insurance portal to request a certificate of currency. You can also adjust your cover and update your payment details from the portal.
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