Determining Your Need for Professional Liability Insurance for Consultants
There are those people working as consultants who fail to realize the potential fallout that may occur by not investing in Professional liability insurance for Consultants. These individuals run the risk of ending up in court if one of their clients feels they didn’t do an adequate job or one of their projects goes awry. Having this important coverage will likely protect them and their livelihood.
This coverage, also called errors and omissions insurance, will oftentimes be necessary, in addition to any general liability policy currently in place, to protect you and your company in the event that a client sues, claiming that you were the cause of their financial loss or any interruption of services.
You should properly assess your exposures
As a businessperson, it’s important to assess any risks along with considering different types of coverage you may need, because as an independent, you don’t necessarily have the financial resources of a large company to back you up in the event of a lawsuit instigated by a client.
In addition, more companies have recently begun requiring independent contractors to carry professional liability insurance when working on projects for them. You can assess your own risk based on the type of work you do, the clients you take on, and just how well your contracts shield you from these types of lawsuits.
If, for example, you implemented a solution to an issue that resulted in a virus being introduced into their computer system, or made them vulnerable to a hacker who was able to access company data, you would likely end up defending your actions in a court of law. It could be something as simple as missing a deadline on a mission-critical project and this resulted in a serious financial loss to your benefactor. If the company experiences financial loss in any of these scenarios, you could be the recipient of legal documents.
You can assess risk by looking at the type of work you do and the financial stake your clients have in it. The reason you may not currently have Professional liability insurance for Consultants isn’t because you’ve decided you can’t afford it, but rather because you feel that the work you do isn’t particularly risky. Don’t make an uninformed assessment of your risk. Talk to an agent that can evaluate your risk potential objectively and help you to determine your need for coverage.