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Consulting with clients and providing specialist advice to clients can be an incredibly rewarding business, but its not without risk. Mistakes can be made and unforeseeable circumstances can occur.
Consultancy is a broad category, but there is a common thread that binds consultants together. Consultants earn their living by providing specialist advice and services to individuals and businesses.
Virtually every consultancy exchange will involve providing business advice to clients. By providing advice at a professional level, where you’re speaking from a position of authority on a particular area of your client’s business, you might also become responsible for the actions taken as a result of your advice.
Professional Indemnity insurance* is an important form of protection for consultants that provide specialist services or professional advice. It is designed to respond to claims against your consultancy business for losses as a result of actual or alleged negligent acts or omissions in the provision of your professional service or advice. Also referred to as P.I. insurance, it can also assist with the legal costs associated with responding to or managing eligible claims.
Public liability insurance is another business insurance product which may be relevant to your consultancy business.
Public liability insurance* can cover legal fees and compensation costs if a customer, member of the public, or a supplier sues you for injury or damage to their property as a result of your alleged or actual negligent business activity.
If your consultancy business has one or several offices where customers, suppliers, or members of the public interact, or even if you visit your clients offsite, then this type of policy may be something you want to consider.
Another business insurance product that consultants may want to consider is Tax Audit insurance*. Even if you operate a small consultancy, or act as an individual consultant, then you may either be managing your tax obligations by yourself or employing an accountant to look after them for you.
That’s where tax audit insurance comes in. This product can cover your consultancy business for specified costs in the event that it is selected by the Australian Tax Office for auditing. The policy offers coverage for the costs of accountants and other nominated professional fees incurred in the course of an audit.
This can offer peace of mind that, in the case of an audit, you can be covered for the otherwise time consuming and expensive costs of engaging an accountant to assist with the audit.
If in the course of your consulting work with a client, you have access to sensitive data or personal information, then you may want to consider cyber liability insurance.
Cyber liability insurance* is a type of business insurance product, which can protect your consulting business against both the legal costs and expenses (including compensation payments) related to cybercrime incidents. Your coverage will generally include cover for eligible expenses and legal costs relating to: data breaches, theft or loss of client information, data recovery, extortion, and crisis management costs.
Business insurance products can be a great way of helping to ensure that some of those things you don’t see coming don’t derail your consultancy business.
At iSelect we’ve partnered with BizCover to help you compare^ business insurance policies, and select the ones which are suitable for your consulting business. Get started online today, or call us on 13 19 20.
* As with any insurance, cover will be subject to the terms, conditions and exclusions contained in the policy wording.
Last updated: 12/02/2020