Potential Liability Claims Against Consultants

Consultants generally work as independent contractors and bear the responsibility of purchasing their own health insurance, auto insurance, and general liability coverage. The nature of their tasks opens them up to the increased potential for lawsuits in areas of errors and omissions risks, raising the need for a consultant professional risk insurance plan.

The Potential Threats of Professional Liability

Many career choices have professional liability concerns, and errors and omissions coverage addresses any claims or lawsuits filed against the professional for perceived or real disregard for professional or contractual obligations. For a consultant, claims scenarios may look like the following:

  1. A consultant creates an IT infrastructure for a client that is ineffective and operable for the first few days of implementation. The client could sue for lost sales, additional expenses, and labor hours incurred while trying to address the failed system.
  2. A consultant provides advice for a certain product or service that turns out to be a terrible choice for the company. The business could then sue over misrepresentation.
  3. A consultant mishandles documents or files that lead to a security breach of the company’s information. The client could sue for resulting damages.

These are just a few of the liabilities that consultants face when going about their business. Strong risk management practices should always include comprehensive professional liability insurance.