5 Types Of Insurance For Independent Consultants And Business Owners

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By Jade Sohn

workdeskBe prepared and opt for the right insurance policies to safeguard yourself against unpredictable hazards or issues that may pop up while running your business.  Choosing suitable insurance plans can prove to be a challenging task. Chief among them is a general liability and professional liability insurance.

Also, individual consultants and married entrepreneurs only qualify for individual health insurance, leaving room for very few Health Maintenance Organization (HMO) options. Further, if you miss an HMO open enrollment period, your organization may have to survive an entire year without coverage. What would you do if an unpredictable event occurs during that time? This post talks about various options that can work as great alternatives in such a situation. Read further to explore them in detail.

1. Professional Liability Insurance

Did you know that if you are a sole proprietor of a business consultancy, you can be held legally and financially liable for any financial loss to your client resulting from your advice or occurring during your involvement? This means that you need to be prepared for the legal and financial fallout of such a situation. Even if your business is billing in the hundreds of thousands, being taken to court could cause you financial hardship, so you may benefit from subscribing to an insurance policy designed for consultant businesses.

If allegations of errors, bad advice or delay in providing a service threaten a consultant’s business, then consultant professional liability insurance can cover costs of hiring an attorney and any settlement or damages arising from the lawsuit.

2. General Liability Insurance

General liability insurance protects consultants against allegations of bodily injury, property damage, and advertising and personal injury. If your client suffers a slip and fracture at your firm, or if you accidentally damage an expensive artifact on your client’s premise, the general liability insurance will cover the medical costs and costs of replacing the artifact respectively.

General liability insurance also covers any legal challenges arising from advertising or personal injuries such as slander, libel, and defamation. If a consultant publishes any material containing false statements about a competitor or makes derogatory comments about a client before others in a way that can cause the client grief or suffering, or causes harm to his professional reputation, then a personal injury lawsuit can be brought against the ‘perpetrator’.

No matter how carefully or conscientiously you may run your consulting business, there is at least a small window of error that can potentially pose financial or legal hurdles. General liability insurance safeguards against such contingencies, allowing you to focus on challenging unfair cases and staying focused on your business rather than stressing about paying attorney fees and financial damages from your business or personal funds.

3.Short-term health insurance

If you’re hard-pressed for time and don’t have enough resources to consider or purchase long-term health insurance, you can opt for short-term health insurance. The advantage of short-term health insurance is that it’s relatively inexpensive. It also holds you to low standards of commitment, so you can always revisit the decision and choose another, better-suited health insurance for your business. Short-term health insurance, however, is not completely reliable. You may be refused coverage if the event involves a chronic health disorder. Plus, coverage earned by short-term health insurance is for low amounts.

4. Insurance through associations

healthyheartbpSome industry associations offer health insurance as a side-benefit of joining. If you are starting a consultancy business, you may want to join networking or co-promotion organizations in your city or town. These organization of which NASE is an example, offer benefits such as health insurance. However, studies by journals such as WSJ have claimed that the ROI (Return on Investment) that you receive from joining such an organization doesn’t justify the enormous joining fees that they charge. However, you may want to consider all benefits such as networking, exposure, and new leads that you get from the organization when weighing the benefits.

5. Health cost sharing

People with good health can consider health cost sharing networks as an option for health insurance. There are companies such as Liberty Healthshare, CHM, and New Health that have started up to provide affordable and no-fuss health insurance for those who can’t afford to go with regular, long-term health insurance. However, such insurance networks tend to reject many applicants on the grounds of having existing health disorders.

When starting a consultancy business, there are many factors that you have to consider. If you can’t manage all of that by yourself, you can work with smart alternatives or hacks that work just as well. This post describes various types of health insurances that can help you fight against unpredictable health hazards or issues that may crop up when running your business. After all, it’s best to be prepared than suffer expensive consequences of ignorant decisions.

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