Consultant insurance, compared on printed starting prices

What insurers print for this trade

A consultant's four questions

1. What can the client lose because of me?. That figure, not your fee, is the exposure. A consultant on a modest day rate advising on a large programme carries a liability out of all proportion to the invoice, and the limit should be chosen against the client's potential loss and the contract's requirement rather than against turnover.
2. Am I on client premises, and what do they require?. Site access usually means a public liability requirement, often at a stated limit, and sometimes a certificate naming the client. It is a cheap cover to add and an awkward thing to be missing on the first morning of an engagement.
3. Do I employ anybody, on any basis?. Employers' liability is compulsory for employees, and the definition reaches further than people expect: an assistant, an apprentice or a family member paid to help can all fall inside it. The duty is set out in the 1969 Act and it is enforced separately from anything a client asks for.
4. What happens to cover when the work stops?. Professional indemnity answers for claims made during the policy period, so it must outlive the engagement. Consultants who work project to project should renew continuously rather than buy for the length of a contract, and should price run off before winding anything up.

Common questions

What insurance does a self employed consultant need?

Professional indemnity first, because the claim is financial loss from advice. Public liability where you visit client sites, employers' liability if you employ anybody, and cyber if you hold client data. Office contents and legal expenses are usually optional extras on the same policy.

How much consultant insurance cover do I need?

The client contract is normally the answer: UK engagements commonly require £1m, £2m or £5m of professional indemnity. Where no contract specifies a figure, set it against what the client could lose if the work went wrong rather than against your fee.

Is consultant insurance tax deductible?

Business insurance premiums are normally an allowable business expense for a self employed consultant or a limited company, in the same way as other costs incurred wholly and exclusively for the business. Your accountant should confirm it for your own circumstances rather than a website.

Can I buy cover for a single project?

Some insurers write short period or project policies, but because professional indemnity is claims made, a policy that ends with the project leaves later claims uncovered. Continuous cover with run off at the end is the safer structure and is usually cheaper over time.

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