Business Consulting Firms Insurance – Cost and Coverage

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

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

Like any business owner, for your business consulting firms enterprise, you must consider how much financial liability you are taking on.

Business Insurance for business consulting firms

If your business consulting firms business runs without proper insurance, you are taking a giant 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. 

In this article, we are giving very general guidelines for growing businesses to highlight what the main kinds of insurance that you need are, and where available, 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 firms business?

What this means, for any business consulting firms 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 firms business is not harbored by laws in the same way as states are, where edicts can place a “cap” on the maximum level of liability.

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

In a court case, it’s purely the duty 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 firms operations, you can’t avoid responsibility for the results 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 firms insurance protect you from?

For your business consulting firms business, the most important kinds of insurance are meant to cover the risks to your business from accidents, from unexpected events, and from mistakes.

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

In the next few paragraphs, we will outline the most important points any business consulting firms business owner should remember when negotiating the insurance needed.

The main types of insurance for your business consulting firms businesses are liability insurance, commercial insurance, asset insurance and workers compensation insurance.

Liability insurance

General liability insurance

Any business consulting firms business is dealing directly with customers, and that means you generally have the danger that some accident can happen to them themselves or else something of theirs can be ruined.

In such a case, they can demand compensation.

General liability insurance policy for your business consulting firms business covers you against claims coming from injury to customers or damage to their property.

It protects your business consulting firms business from the claims themselves and as well to any resulting court costs and legal fees of the lawsuits.

In many cases, it will even help you to qualify for extra business from city and state organizations, where contracts insist on proper liability insurance.

The average level of general liability insurance for your business consulting firms business would be with a boundary of $1 million for a single submission 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 firms insurance operations.

Professional liability insurance for your business consulting firms business

In the event where a client alleges some negligence, errors, or omissions in how you conducted your business consulting firms business for them, you can quickly be involved in a court case.

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

Most small business consulting firms 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 firms insurance section below for average prices of professional liability insurance for your business consulting firms 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 you delivered didn’t meet your description of function, or that your guidance was basically incorrect.

You need to understand the specific laws of product liability in your own state.

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

To cover yourself against any likely lawsuit, you need Product liability insurance for business consulting firms

Only you can determine exactly how much insurance you must have.

Best advice is to talk to experienced insurance agents, brokers or company representatives for help.

Commercial insurance

Commercial vehicle insurance for your business consulting firms business

Take care! – most 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 best way to make sure that your vehicle is insured for both its own value, and the valuable contents, is by taking out a designated commercial vehicle insurance package.

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

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

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

The required value of the insurance is calculated on the depreciated value of the vehicle, and your requested level of cover of contents. 

Tools and Equipment insurance

Since your business consulting firms business needs specialized and expensive equipment, you can appreciate how much it can cost to replace it in case of any damage, loss, or theft.

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

Also, 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 specialized gear quickly out of your own pocket, you need full-level equipment insurance so that you can immediately buy everything needed to keep your business consulting firms business running.

It is hard to advise how much equipment insurance you need – it’s really dependent on how much you have invested in your business consulting firms business’ equipment.

Commercial Property insurance

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

If you own the building, you probably have a substantial capital investment, as well as a big liability if there’s a mortgage.

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

If your business consulting firms business works in areas of high risk, like Texas or South Carolina, supplementary 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 firms business premises, there is a need for more supplementary cover than in warmer climes.

Although the level of cover depends mainly 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 firms insurance section below to give some estimate of the average prices per million dollars of property insurance for your business consulting firms business.

Temporary insurance by month, week or day for your business consulting firms business

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

Using short-term insurance makes good sense. Business insurance by the month, day, or week – temporary insurance for business consulting firms – 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 lower premiums but still having identical risk cover.

The essential feature of short-term insurance is that you purchase the cover for a defined period – a nominated 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 larger 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 firms business

You have the choice to combine several 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 firms businesses, such as yours.

There are two limits that will dictate whether BOP is suitable for your own business.

BOPs cannot cover your professional liability or commercial vehicle cover.

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

The usual business that can take out a BOP policy must have no more than one hundred employees, and not more than five million dollars in annual revenue.

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

Workers Compensation insurance for your business consulting firms business employees

In almost all states, it is mandatory to have workers compensation insurance when your business consulting firms business has one or more employees.

Workers compensation insurance covers the operation against any costs that arise if a worker 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 regulations in this regard can leave you as the employer obliged 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 cannot get your workers compensation obligations from private insurance companies.

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

However, you must refer to the relevant authorities in your state.

Average costs of these types of insurance

Although every business consulting firms insurance level is unique, there are enough examples of average quotes from insurance companies for us to give rough guidelines, including what are the cheapest rates offered.

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

The list below is of annual premiums we have collected for the main types of insurance your business consulting firms businesses needs.

Types of insurance Price range
Public liability insurance $390 – $590
Commercial vehicle insurance $1550 – $3235
General liability insurance $550 – $990
Product liability insurance $210 – $740
Equipment insurance $415 – $1140
Commercial insurance $1025 – $2425

Cost of insurance for your business consulting firms operations depends on many different factors.

We have reckoned these figures for small independent business consulting firms businesses.

In larger states like Texas, premiums are generally about 20%-30% higher than national averages, while in smaller states like New Mexico, they will be about 20%-30% cheaper.

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

You should discuss with professional insurance agents and brokers, or insurance company representatives.

As well you can let the internet do the work for you by enquiring about 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 firms operations?

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

Does my business consulting firms business have to have insurance?

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

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

What does a small business consulting firms business insurance policy cover?

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

The exact 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 firms insurance.

How much will business consulting firms business insurance cost?

On top of the size of the business, some other factors, such as location and claims history, are used to determine your policy’s cost.

You should consult with professional insurance agents and brokers, or insurance company representatives.

You can search for more information insurance for business consulting firms, in the search box below, and follow the relevant links.

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