Insurance for consultants and advisers
Your largest exposure is the one GL excludes.
For a business that sells judgement rather than a physical product, the most likely serious claim is that the advice was wrong and the client lost money as a result.
That claim is specifically outside general liability, which is why so many consultants hold a policy, can produce a certificate, and are uninsured for the thing most likely to happen to them.
Professional liability comes first
It responds to allegations that your work or advice caused a client financial loss — a recommendation that did not work, a piece of analysis with an error in it, a deadline missed with consequences.
It covers the defence as well as any settlement, and for consultants the defence is usually the larger part, because these claims are argued over professional judgement rather than measured against physical damage.
It responds to allegations rather than to established failures. An unfounded claim still has to be answered, and answering it is what you are buying.
Claims-made, and the two things it demands
Professional liability is normally claims-made: the policy in force when the claim is made responds, not the one in force when the work was done.
The retroactive date is the first consequence. It sets the point before which work is not covered, and when changing insurer it must be carried forward or cover for all previous work quietly disappears — with no gap in cover and nothing that looks wrong on the paperwork.
Tail cover is the second. When you retire, sell, or stop consulting, cover for past work generally stops with the policy unless extended reporting is arranged at that point. It is rarely available retrospectively.
What else a consultant usually needs
Less than a business with premises, but not nothing.
- General liability, frequently because a client contract requires it rather than because the exposure is large
- Cyber, where you hold client data — which most consultants do without thinking of it that way
- Business property or an endorsement, for equipment kept at home
- Hired and non-owned auto, where you or anyone else drives to clients
- Employment practices liability, once there is anybody else on the payroll
The contract usually decides
Most consultants buy cover because a client asked for it, and the client's requirements are frequently more specific than a general assessment of risk would produce.
Read the insurance clause before signing. It will usually name the covers, the limits, and sometimes a required retroactive date — which matters if you are newly insured and the contract expects cover for work already done.
Where a requirement cannot be met, that is a negotiation before signature rather than a problem discovered afterwards.
Common questions
Often, mostly because contracts require it. The professional liability policy is the one that answers your largest exposure; general liability answers physical harm, which for a consultant is usually a smaller risk.
Claims-made cover generally ends with the policy, taking past work with it. Tail cover, arranged at the point you stop, is what keeps that window open and it is rarely available afterwards.
Because it defines how far back the policy covers. Carrying the original date forward when you change insurer is what preserves cover for work you have already done.
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This page is general information, not advice about your specific circumstances. A licensed insurance professional can tell you what’s actually available to you.
General information only, not insurance advice. Coverage, availability, and terms vary by insurer and by state, and are subject to underwriting. Quote My Policy LLC is a licensed insurance producer. Nothing here binds coverage.