Consultants sell judgment, and that is exactly what gets tested when a client is unhappy. A clean insurance setup starts with the right core policy and adds the pieces your contracts and clients actually ask for. Here is a practical checklist.
Start with E&O
Errors and omissions coverage, also called professional liability, is the core for most consultants. It generally responds when a client alleges your advice or services caused them a financial loss. That is the exposure a consulting practice carries every day, and general liability does not cover it. If you buy one policy, this is the one.
Add general liability or a BOP
General liability generally handles bodily injury and property damage, like a client hurt in your office or a laptop you damage on site. Many contracts require it. A business owners policy, or BOP, often bundles general liability with property coverage for your equipment, which can be a tidy fit for a small practice.
Consider cyber
If you store client data or work inside client systems, cyber coverage may matter. E&O and general liability generally exclude many cyber events, so a breach or a ransomware event can fall between policies. The more data you touch, the more this belongs on the list.
Read your contracts
Client contracts often set the real requirements: specific limits, additional insured status, and sometimes waiver of subrogation. Read them before you sign. A mismatch between what a contract asks for and what your policy provides is a common and avoidable problem.
Solo vs firm
A solo consultant may start with E&O plus a general liability or BOP. A firm with staff and subcontractors typically adds cyber, employment practices liability, and higher limits, since more people and more clients mean more exposure. Match the setup to your size, not to a template.
Questions to ask your advisor
- Is E&O the core of my program, and is the limit right for my work?
- Do I need general liability or a BOP for my contracts and my office?
- Does the data I handle call for cyber coverage?
- How should my setup change as I add staff or subcontractors?
- Have we checked my policy against my active client contracts?
Getting the core right and then matching the extras to your contracts is most of the job. A short review maps your coverage to the work you actually do, so you are not buying a template and hoping it fits.
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