Business insurance for consultants

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    Chris Godfrey

    Page written by Chris Godfrey. Last reviewed on January 4, 2024. Next review due April 6, 2025.

    In industries as diverse as agriculture, antique art, finance and fibre optics, consultants provide the expert skills and knowledge that businesses cannot do without. However, even the best can make a mistake or miss an important detail, and sometimes those errors can come with expensive consequences. Fortunately, business insurance for consultants is available to reduce or eliminate this risk, protecting professionals from potentially catastrophic compensation claims and legal costs if things should go wrong. 

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      What is business insurance for consultants?

      Business insurance for consultants is an umbrella term for a range of policies that can protect consultants and their businesses from third-party compensation claims for injury, loss or damage caused by the services they sell.

      Why do I need business insurance in consulting?

      If you offer knowledge, skills or advice to clients and customers – either as a self-employed consultant or for a company – then you need consultants’ insurance. The potential cost of claims arising from any errors or accidents caused by the services you provide can far outweigh the cost of the policy. Typical cover will range from £2million to £5million, but the amount of cover you need will vary depending on your profession, your clientele, and the type of information and services you provide. 

      Common reasons for compensation claims include:

      Unhappy clients

      Not all business is rainbows and unicorns. Sometimes, relationships with a client can go sour. Perhaps you or someone you employ misunderstands a project, provides incorrect advice, or accidentally shares some confidential information. In any event, if a client brings claim against you, consultants’ insurance can cover the legal and compensation costs whether you’re at fault or not.

      Data risks

      Not only do you need to keep your own data safe and secure, you have a legal obligation to do the same for your clients. Errors from your side, or invasive cyber-attacks from external sources could expose yours or your clients’ confidential data. Or what if you lost access to your systems and that caused you to fail on an important project? The outcome of incidents like these will probably be a compensation claim from a displeased client or other third party. However, consultants’ insurance can take care of the claim and legal costs, and depending on the level of cover you buy, it may also provide access to cyber-crime experts who can quickly get your systems back up and running. 

      Accidents and injuries

      Accidents and injuries may be rarer in consulting than a high-risk business such as construction, but they can still happen any time. Imagine that a client trips on a loose floor tile whilst at your premises, or you or one of your employees accidentally damages client property?

      A claim for personal injury or property damage may be forthcoming. And it isn’t just the cost, it’s the unwanted distraction and loss of valuable time it will create for you as well. Consultants’ insurance can cover the cost of settling or fighting the claim, whilst you keep your focus solely on your business.

      What type of insurance do I need as a consultant?

      Important insurance for consultants includes:

      Professional indemnity

      Professional indemnity insurance – also known as professional liability insurance – covers businesses and individuals that advise clients, help them navigate complex financial or legal affairs, or provide them with vital information that may be published in the media. Professional indemnity (PI) can protect you if a client makes a financial loss because of fault in your work and then makes claim against your business. Trade associations, government bodies, public institutions, and major customers will often require proof of a minimum level of PI insurance before doing business with you.

      Public liability insurance

      Public liability insurance protects you if someone is injured, or their property is damaged because of the services that you or your business provides. This type of cover, also known as PL or Liability Insurance, is designed to protect your business against third party claims for injuries or property damage from a customer or client, passer-by, or a visitor to your business premises.

      Employers’ liability insurance

      Under the Employers Liability Act of 1969, employers’ liability insurance (EL) is a legal requirement for most UK employers. EL protects you and your employees, (including those who no longer work for you), should they be injured or become unwell as a result of working for your business. EL typically covers the associated legal and compensation costs, and other damages of such events, but it can also cover accidental injury or damage caused by an employee to a third party, such as your customers.

      What does consultants’ insurance cover?

      Depending on the cover you buy, consultants’ insurance can protect against:

      • Claims made for injury to employees, sub-contractors, clients, members of the public
      • Claims for property damage or loss
      • Project errors and omissions 
      • Theft of business tools or IT equipment 
      • Data loss, cyber-attack, systems malfunctions
      • Loss of income and business disruption
      • Legal disputes
      • And more

      How much does business insurance for consultants cost?

      Premiums for consultants’ insurance can start at less than £10 per month, but costs will vary depending on your profession and the type of information, advice and services you provide.

      How Swoop can help

      All business involves risk, but that doesn’t mean you have to suffer the consequences if things go wrong. Don’t let a slip of the pen, bad advice, or wrong information wrongfoot your business. Contact Swoop today to compare top-quality consultants’ cover from different providers and to discuss all your business insurance needs. 

      Written by

      Chris Godfrey

      Chris is a freelance copywriter and content creator. He has been active in the marketing, advertising, and publishing industries for more than twenty-five years. Writing for Barclays Bank, Metro Bank, Wells Fargo, ABN Amro, Quidco, Legal and General, Inshur Zego, AIG, Met Life, State Farm, Direct Line, insurers and pension funds, his words have appeared online and in print to inform, entertain and explain the complex world of consumer and business finance and insurance.

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