It is not easy to identify all of the key risks that you will face as an independent consultant or contractor, evaluate them, put in place separate insurance coverage for each risk and do all of that at a reasonable total cost.
The insurance industry recognizes the range of coverage that will typically be required by most consultants and contractors and in response has developed a single insurance product to meet the need; this is generically referred to as an All Risks policy.
In simple terms an All Risks policy is one product that provides protection against a wide range of risks that would typically include:
•Professional Indemnity Insurance
•Employers liability insurance
•Public liability insurance
•Legal expenses insurance
•Product liability insurance
Seek advice from an appropriately qualified and experienced insurance adviser.
In order to save time and secure the insurance coverage that is appropriate for your consulting business you should establish an enduring relationship with an experienced insurance broker and take advantage of that expertise.
Business Interruption insurance for contractors compensates for the costs and lost profits as a consequence of your business suffering a major disruption.
For example, a fire either at a client premises or in your home may result in the loss of files, computer equipment or other materials that are central to your consulting business.
Amounts paid out by business interruption insurance will be critical to enabling you to rapidly re-establish your consulting practice, replacing essential equipment such as laptop, software, cabling and supporting technology such as wireless routers and servers, telephone equipment, printer and other office furniture.
In addition, it may be necessary for you to incur the extra expense of renting a workspace while your main operational office is being repaired or reinstated. This process could take many months during which time you will need an alternative space.
A critical requirement that is often overlooked, typically because it fails to make it on to the list of priorities, is to ensure that you maintain up-to-date back up copies of all information that is central to your consulting practice.
This would include but not be limited to:
•Intellectual Property including your proprietary consulting models and methodologies
•Your database of contacts
•Copies of commercial contracts with clients and suppliers
•All financial and tax related information
If any or all of the information listed above is lost then your ability to continue in business would be substantially impaired.
Check with your local qualified insurance agent for these products.