Business Law

As a sole proprietor offering team development and leadership training, what kinds of business insurance do I need?

That’s a really good question.  Thanks for asking about a subject that most entrepreneurs ignore.  As a consultant, there are several types of insurance you should consider carrying, and for the most part, these types of insurance are pretty economical to carry and may in fact be a requirement for some clients you do business with.

First, consider General Business Liability insurance. Most clients ask you to have this insurance to protect them from costly lawsuits if, for example, you injure someone while driving on business on their behalf.

Next, because you’re in the business of giving advice, consider Error and Omissions insurance. This insurance is designed to protect you from financial losses your work may cause a client due to negligence, lack of quality controls for instance. This insurance is usually pretty expensive to get and is a judgement call for consultants depending on the type of consulting you’re doing, and the value of the client decisions being made with your advice.

Also consider Business Property Coverage which protects your business location,and  its content from loss of income. If you work from home, a certain amount of coverage may already be in your homeowner’s policy, so check it out.

Next would be Business Interruption insurance which covers you against losses due to temporary shutdown, ie. Fire.

And finally, Personal Liability Umbrella policy. This insurance provides protection once the limits of a standard liability policy have been met.  This isn’t technically business liability insurance and won’t meet your clients’ requirements for you carrying commercial liability insurance, but it can sometimes be combined with other types of insurance at a pretty good discount.

As always, we suggest you review your specific requirements with a commercial insurance broker first to make sure you are carrying the right insurance.  Good luck with your business!


Norman Leach
National Business Writer; Instructor, Mount Royal University

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