Business consultant insurance, on published figures

What insurers print for this trade

How consultants should approach it

1. Match the limit to your largest client, not your average one. Procurement teams set a professional indemnity requirement per contract, and the largest client in your pipeline effectively sets your limit for the year. Ask before the proposal goes in, because discovering a £5m requirement at contract stage is a delay you are paying for.
2. Write a scope of work you would be happy to be judged against. Most consultancy claims are really scope arguments. A written engagement letter that says what will and will not be delivered, on what assumptions and with what client input, is the document that decides whether an unhappy client has a claim at all.
3. Remember that cover follows the claim, not the work. Professional indemnity responds to claims made while the policy is live. Work done in a good year can generate a claim two years later, so the policy has to be renewed continuously and run off cover bought if you stop trading.
4. Declare regulated or high hazard sectors. Advising financial services, healthcare or construction clients changes the underwriting, and some sectors are excluded on standard consultant wordings. Naming your client base at quote is what keeps the cover matched to the work.
5. Do not overlook the site visit and the data. Public liability answers for the laptop bag that broke a client's screen or the visitor who tripped in your office, and cyber answers for the client data you hold. Neither is expensive beside professional indemnity, and both are commonly required by client contracts.

Common questions

Is professional indemnity insurance mandatory for consultants?

There is no general legal requirement in the UK outside regulated professions, but it is a contractual requirement for most corporate and public sector work. Employers' liability is a legal requirement as soon as a consultancy employs anybody.

What does business consultant insurance actually cover?

Professional indemnity covers your legal liability for financial loss caused by negligent advice, work or delay, plus the cost of defending the allegation. Public liability covers injury and property damage, and most consultant packages let you add cyber, office contents and legal expenses.

How much does consultant insurance cost?

The starting prices in the record on this page are what each insurer prints, and they describe a sole consultant with a modest limit and no unusual sectors. Premiums rise with the limit, the turnover, the sectors advised and any claims history, so the printed figure is a floor rather than a quote.

Do I need cover for work delivered through my limited company?

Yes, and the policy should be in the company's name rather than your own. Clients contract with the company, so the certificate they ask for has to match the entity on the contract, which is a frequent and avoidable problem at onboarding.

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