Policy Protects Consultants Who Are the Epitome of “Small Business”

Talk about the concept of “small business”—when you, as a consultant, are your own business, it’s all up to you in terms of your performance, your success—and unfortunately, your exposure to risk for lawsuits alleging errors or omissions  or allegations of malpractice that you may encounter in the course of doing business. Fortunately, professional liability insurance for consultants is available, offering protection in the event you are sued—a potential lifesaver for your business, because legal defense costs (even if you are found not guilty) can be so expensive. The coverage pays for costs for your defense as well as any settlement, judgment or award up to the limits on the policy.

The coverage came in handy for Kim, who ran a small business as a bridal consultant for many years. Kim took on a Bridezilla-style client who hired her to pull together a fabulous formal wedding for 300 guests. The bride’s budget swelled as she added more and more elaborate food, flowers, liquor, décor, and other items that had not initially been selected. Then just a few days before the event, the groom called the whole thing off, he’d had enough. The would-be bride was enraged when she found out that many of the deposits on the various things she’d ordered for her doomed ceremony were not going to be refunded, despite the late notice. The bride sued Kim, saying she should have been able to wrangle reimbursements for her. Ultimately the court found in Kim’s favor, but the cost to hire an attorney to represent her amounted to several thousand dollars. Fortunately, Kim had purchased a policy that covered her for this sort of risk, so she was not out of pocket for these costs—which would otherwise have sunk her business.

If you provide a service to your clients, consider professional liability insurance for consultants. Contact a professional insurance agent to learn more about this valuable protection for your business.

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