Consultants and consulting services are available in a number of industries in Canada’s economy. The kinds of service they provide, and the resulting insurance they need are equally varied and broad. From freelancers and contractors to consulting firms, whether in business, management, information technology and many other technical fields, professionals are exposed to many risks that could result in a loss in today’s increasingly litigious environment. As a professional, you know to be prepared for the unexpected and a basic part of that is to have insurance to protect your hard work.
As with any business, regardless of its size or operations, the insurance to have is almost always a commercial general liability (CGL) policy because it protects the business and any third party if the business directly causes harm and is sued.
What does CGL cover?
Property damage and bodily injury – this coverage pays for legal costs if the business is found to be legally responsible for a third party’s bodily injury such as a slip and fall, or damage to their property.
Personal injury – this coverage pays for legal costs if the business is found to be legally responsible for harm to reputation such as slander or libel.
Tenants’ Legal Liability – this coverage applies to premises rented by the business and pays the landlord for damage to the unit caused by a covered event. This coverage is required by landlords if you rent space for your business.
Medical payments – this coverage helps pay for a third party’s medical bills if they were injured due to your business operations.
What other insurance should consultants have?
A commercial policy package is often available from insurance providers that bundles a number of coverages (in addition to CGL) that most consultants need.
Professional liability insurance is a must-have
For some professionals, this coverage is required by law or their associations to be able to register their business and operate. Some consulting agreements or contracts require this as well. For any size of business that provides advice or a service, whether a freelancer or independent consultant or a consulting firm, professional liability insurance (also known as errors & omissions) is a key coverage to have.
Why is professional liability insurance so important? Put simply, this covers legal costs if a business is sued for negligence or harm in relation to the service or advise provided as a consultant, which are not usually covered in a CGL policy. For example, a tax preparation service filed a clients’ return incorrectly that resulted in fines and penalties and the client sued the service provider for negligence – this would be covered under the provider’s professional liability policy. There would be no coverage under the CGL policy.
Other coverages to consider
Commercial property
A consultant or firm that has an office with equipment, furniture and more would need insurance that protects the business's physical assets. This coverage can protect real property (building and other structures) and equipment (boiler and machinery, computers, office furniture and more).
Business interruption
Covers the income a business expects if operations are forced to shut down due to a covered claim.
Cyber liability
A consultant or firm that deals with confidential and personal information would need insurance that protects this information from a cyberattack or data breach. This coverage covers the costs of restoring data, legal action, investigation and remediation in the event of a claim.
Simple or complex business insurance needs? A broker is the best way forward.
Whether you’re a contractor, professional, service provider, or manufacturer, it’s best to seek the advice of a licensed commercial broker and discuss your business operations to get the right insurance solution. As your business grows, your coverage needs also grow – an insurance broker can assess and maintain your policy to help ensure you have protection in place.
At McClelland Insurance, our brokers have the expertise and experience in various industries and will work with you to provide the best available coverage that’s tailored for your business.
Ready to get coverage or have more questions?
Visit our commercial insurance page
to learn more about insurance for consultants.
The content on this page is for information only. The insurance products described are subject to terms, conditions, limitations and exclusions that are outlined in the policy wording. Please refer to the policy wording for complete details.