What Insurance Should I Have?

If you’re a solo consultant, you absolutely should be registered as a limited company, and you should have insurance.

Many large organisations simply won’t hire you without seeing your insurance policies.

I’d recommend:

• Professional Indemnity Insurance ($2m minimum). This is probably the most important insurance for a consultant to have. It protects you against claims of damage caused by negligent services and advice. Some typical examples of these claims include:

  • If you recommend a platform vendor that later doesn’t fulfil the specifications,

  • If you guarantee an action will result in an outcome that it doesn’t.

  • If a website you helped set up is used for using copyrighted photos.

  • If you design a system that results in a data hack or breach.

  • etc…

  You can probably come up with a bunch of similar ideas yourself. Any time you provide advice, there is a slim possibility you might provide advice in error (or, more likely, which the client perceives to be in error).

  Then, there is an even slimmer possibility the client may pursue damages against you. On a long enough time scale, the odds of this happening increase.

  Thus, you should have insurance to cover potential claims against you (I’ve had it for a decade and have never used it, but I’m glad I have it).

• Public Liability Insurance ($2m minimum). Public Liability Insurance covers a business for claims made by members of the public who suffer an injury or property damage due to the business's activities.

  For example, you might be providing services to a client at the client's premises and accidentally damage a piece of equipment or property. If the client decides to claim against you for the cost of repairs or replacement, Public Liability Insurance will cover the costs associated with defending the claim and any compensation awarded to the client.

  Likewise, if you’re conducting a training session for a client and a participant suffers an injury, they may claim the consultant for compensation.

  I know one consultant who once accidentally damaged a costly piece of art in the foyer of a company headquarters. Although they weren’t required to pay for it, the cost would have been ‘mid-five figures’ if they had.

• Employers’ Liability Insurance ($10m minimum). If you have employees or contracts, you should have Employers Liability Insurance. This protects you if your team claims for injury or illness due to their work for you. For example, if one of your team suffers an injury while working on a client’s premises (or potentially even travelling to and from the premises), employers’ liability insurance would cover costs associated with defending the claim and any compensation awarded to the employee.

  Even if you have contractors working for you, it’s highly recommended that you have this insurance and coverage for them.

• Crisis Containment Insurance ($25k minimum). This is probably the only insurance I’d list as optional, but you should still have it. Crisis containment insurance covers your costs associated with managing and responding to crises such as:

  • Data breaches or cyber-attacks

  • Accidents or incidents resulting in injury or death

  • Disasters or natural events

  • Reputational damage from negative media coverage or social media activity

  • Legal or regulatory investigations

  Check the wording carefully to know exactly what this does or doesn’t cover. It may often cover costs for crisis communication, legal fees, public relations efforts, and other expenses related to managing the crisis and protecting your organisation’s reputation.

  It may also cover situations where you’ve provided advice which has caused a crisis.

But, yes, make sure you have insurance please.