Business Consulting insurance – what kind and at what cost

Whenever you budget the expenses of your business, Business Consulting insurance must be near the top of the list because you can’t always know exactly what could happen in the future.

Need General Liability Insurance for Your Business Consulting Business?
Get Your Free Quote

With the protection provided by liability insurance and all the other kinds of insurance we will tell you about, you can protect your business and yourself in case something unforeseen happens.

Like any business owner, for your Business Consulting enterprise, you must consider how much financial danger you are taking on.

If your Business Consulting business runs without proper insurance, you are taking a tremendous chance not just of losing some money but of a final wipe-out.

This is because the laws in every state are very strict in enforcing liability on the owners of businesses for the upshots of their actions. 

Business Consulting Insurance

In this article, we are giving very general guidelines for small businesses to outline what the main kinds of insurance that you need are, and where possible, a rough guide to how much you can expect to pay.

The question is, can you afford to NOT have insurance for your Business Consulting business?

What this means, for any Business Consulting business owner, is that if some customer claims that your business caused them some physical or economic damage, a court can award damages far beyond the total size of your business.

Your Business Consulting business is not sheltered by laws in the same way as states are, where legislation can place a “cap” on the maximum level of liability.

In some states, like Montana, there are specific monetary levels that limit the amount a court can award in any case against the state.

In a court case, it’s purely the right of the jury to award whatever amount they deem appropriate, even sometimes giving a plaintiff more than they have sued for.

When you are running your Business Consulting operations, you can’t deny responsibility for the consequences of your actions.

Even more importantly, unless you have spent in advance the money necessary to have your business running as a corporation, all of that liability belongs to you as an individual.

What does Business Consulting insurance protect you from?

For your Business Consulting business, the most important kinds of insurance are designed to cover the risks to your business from accidents, from unexpected events, and from mistakes.

In addition there are some official kinds of insurance that various states require.

In the next few paragraphs, we will outline the most important points any Business Consulting business owner should know when negotiating the insurance needed.

The main categories of insurance for your Business Consulting businesses are liability insurance, commercial insurance, asset insurance and workers compensation insurance.

Liability insurance

General liability insurance

Any Business Consulting business is dealing directly with members of the public, and that means you usually have the danger that some accident can happen to them personally or else something of theirs can be damaged.

In such a case, they can demand compensation.

General liability insurance policy for your Business Consulting business insures you against claims coming from injury to clients or damage to their property.

It protects your Business Consulting business from the claims themselves and also to any resulting court costs and legal fees of the lawsuits.

In many cases, it should help you to qualify for extra business from city and state organizations, where contracts require proper liability insurance.

The usual level of general liability insurance for your Business Consulting business would be with a cap of $1 million for a single event and a total of $2 million for the whole year.

See the table in the costing section below for average prices of general liability insurance for your Business Consulting insurance operations.

Professional liability insurance for your Business Consulting business

In the event where a customer alleges some negligence, errors, or omissions in how you conducted your Business Consulting business for them, you can quickly have to fight a monetary claim.

Even if the lawsuit against you is decided in your favor, the cost of defense can be substantial, and the impact on your reputation can be damaging.

Every small Business Consulting business should have enough professional liability insurance to cover a once-off claim of $25,000, with annual cover of $50,000.

See the table in the cost of Business Consulting insurance section below for average prices of professional liability insurance for your Business Consulting operations.

Product liability insurance

Whatever goods you sell or advice you give about the goods, you are running a risk that clients may claim that what they received didn’t meet your description of function, or that your advice was basically incorrect.

You need to know the particular laws of product liability in your own state.

For example, in California, all businesses in the supply chain can be held responsible for damages caused by products claimed to be defective.

To cover yourself against any following lawsuit, you need Product liability insurance for Business Consulting

Only you can estimate exactly how much insurance you need.

Best advice is to consult with experienced insurance agents, brokers or company representatives for guidance.

Commercial insurance

Commercial vehicle insurance for your Business Consulting business

Be careful! – almost all policies for private vehicle insurance do not cover any event like theft or accidental damage when the van is being used for business purposes.

The proper way to make sure that your vehicle is insured for both its own value, and the valuable contents, is by taking out a direct commercial vehicle insurance package.

Commercial truck policies cover the value of any vehicle in case of accident, malicious damage, fire, or theft.

Also, in case of any accident, the van itself, the content and any legal bills, medical expenses, and property damage is guaranteed if your van is involved in a collision.

Most states, other than Virginia and New Hampshire, require this type of insurance.

The required value of the insurance depends on the depreciated value of the vehicle, and your declared level of cover of contents. 

Tools and Equipment insurance

Since your Business Consulting business needs specialized and dedicated equipment, you know how much it can cost to replace it in case of any damage, loss, or theft.

The equipment may be subject to malicious damage, deliberate fire, theft, other such unforeseen acts.

In addition, acts of nature like lightning strikes, hurricanes, earthquakes, and other highly damaging natural events can eliminate your whole business in one stroke.

Unless you can afford to immediately replace such unique gear quickly out of your own pocket, you need full-level equipment insurance so that you can immediately buy whatever needed to keep your Business Consulting business running.

It is impossible to advise how much equipment insurance you need – it’s really dependent on how much you have invested in your Business Consulting business’ equipment.

Commercial Property insurance

Any Business Consulting business that owns or rents space in a building should have a commercial property insurance policy.

If you own the space, you probably have a substantial capital investment, along with a big liability if there’s a mortgage.

Your physical building location needs to carry insurance coverage for the value of the premises and contents against accidental occurrences like fire and storms, and against man-made damages like theft and vandalism.

If your Business Consulting business operates in areas of high risk, like California or North Carolina, extra coverage may be needed for earthquakes and hurricanes or tornadoes.

In other states like Washington, where unlimited cold snaps can cause damage to outer coverings of Business Consulting business premises, there is a need for more supplementary cover than in warmer climes.

Although the level of cover depends entirely on the value of the property, it’s not possible to say what cover your need, but we have been able in the table in the cost of Business Consulting insurance section below to give some indication of the average prices per million dollars of property insurance for your Business Consulting business.

Temporary insurance by month, week or day for your Business Consulting business

Is your Business Consulting business working part-time or casually, or is the level of business seasonal?

Using short-term insurance makes perfect sense. Business insurance by the month, day, or week – temporary insurance for Business Consulting – are special policies where you can cover a specific period when you want to be covered.

By only paying for that period of cover, you will save by having less premiums but still having the same risk cover.

The essential feature of short-term insurance is that you buy the cover for a defined period – a designated date, or a week or month starting on a specific date, for example for 30 days beginning on the specified date.

When you are expecting periods of higher business activity, get the existing cover increased.

Talk to your insurance agent, broker or the company’s representatives to see what options you have.

Business Owners Policy BOP for your Business Consulting business

You have the choice to combine a few of the important kinds of small business insurance in one policy that is known as the business owner’s policy – BOP.

A BOP integrates commercial property and public liability insurance by incorporating these coverages into one insurance policy, which can save you money.

BOP insurance will cover you if any claims of injury or property damage are made.

It is mostly the right choice for small and medium-sized Business Consulting businesses, such as yours.

There are a few limits that will rule whether BOP is suitable for your own business.

BOPs cannot cover your professional liability or commercial vehicle policies.

Also, the size of your business will rule whether you are permitted to take out BOP cover.

The typical business that is eligible for a BOP policy must have less than one hundred employees, and under five million dollars in annual turnover.

In addition, you must separately take out the mandated worker’s compensation, health and disability insurance as determined for your state.

Workers Compensation insurance for your Business Consulting business employees

In many states, it is mandatory to have workers compensation insurance when your Business Consulting business has one or more employees.

Workers compensation insurance covers the business against any costs that arise if any hired hand experiences an injury or becomes sick as a result of work.

The benefits cover medical expenses, death benefits, lost wages, and vocational rehabilitation.

Failure to meet a state’s laws in this regard can leave you as the employer having to pay penalties levied by the states.

Some states, such as North Dakota, Ohio, Washington, West Virginia, and Wyoming only permit coverage from the government-run monopoly state funds.

In these states, you may not get your workers compensation obligations from private insurance corporations.

Workers compensation premiums are worked out based on the employee’s pay, and usually come out at around $1.00 per $100 per month.

However, you must see the relevant authorities in your state.

Average costs of these types of insurance

Although every Business Consulting insurance level is unique, there are enough examples of usual quotes from insurance companies for us to give approximate guidelines, including what are the cheapest rates offered.

Of course, you should always check with an insurance representative what’s relevant for your business.

The list below is of annual premiums we have researched for the main types of insurance your Business Consulting businesses needs.

Types of insurance Price range
General liability insurance $583 – $1208
Public liability insurance $266 – $503
Commercial insurance $845 – $2608
Product liability insurance $228 – $558
Commercial vehicle insurance $1740 – $3377
Equipment insurance $389 – $1458

Cost of insurance for your Business Consulting operations depends on many different factors.

We have calculated these figures for small freelance Business Consulting businesses.

In larger states like California, premiums are generally about 20%-30% higher than national averages, whereas in smaller states like New Mexico, they can be about 20%-30% less.

The location and size and type of your Business Consulting business can have a big effect on the cost of different policies.

You should talk to professional insurance agents and brokers, or insurance company representatives.

Also you can let the internet do the work for you by looking for insurance companies near where your business is located.

Another good source of information is the local Better Business Bureau in your town.

FAQ

What is small business insurance for Business Consulting operations?

This is a general term used to describe common insurance policies designed to protect Business Consulting business owners from risks like bodily injury, property damage, claims of negligence.

Does my Business Consulting business have to have insurance?

Some of the kinds of insurance are not mandatory for you to operate your business, but they can protect you from risks in your business operations.

Certain other forms are required by state law, such as workers compensation and vehicle insurance.

What does a small Business Consulting business insurance policy cover?

Liability insurance provides coverage against lawsuits or claims filed by a client for bodily injury, property damage, or negligence.

The precise cover will vary based on your own operations.

See the table in the costing section above for average prices of the recommended policies for Business Consulting insurance.

How much will Business Consulting business insurance cost?

As well as the size of the business, certain other factors, such as location and claims history, are used to determine your policy’s cost.

You should talk to professional insurance agents and brokers, or insurance company representatives.

Was this helpful? Share it!
SBCoverage.com
Logo
Enable registration in settings - general