As a marketing or management consultant, you know that details make all the difference in the success of a business. When you step in to help your clients, you plan for everything, down to the worst-case scenario. But when it comes to protecting your own business, do you give yourself the same attention?
Accidents and financial losses can occur at any time, especially when you hold a company's success in your hands. Savvy consultants often turn to business insurance for security against the elements outside their control. Additionally, you'll want to put your own keen eye for details to work to ensure your business has a solid risk management plan should disaster strike. Read on to discover how you can actively mitigate your consulting firm's exposure to risk.
Risk Management Tips for Marketing or Management Consultants
As consulting professional, sometimes the fate of your clients' businesses rests in your hands. They trust you to turn their business around, expand their brand exposure, and increase their efficiency. If a client is dissatisfied with the result, they may turn to the courts as a means of resolution — and all it takes is one lawsuit to jeopardize your business financially. To combat the risk of lawsuits, mistakes, and situations outside of your control, take a look at this guide for five risk management tips you can start implementing immediately.
#1: Use Detailed Contracts
Begin all consulting projects with a detailed contract.
A contract with clearly stated terms might be enough to dissuade a disgruntled client from suing your consulting business if a project doesn't turn out as they'd hoped. This includes new contracts if the project changes course midway through. You'll want to update the timelines accordingly as well. When you have everything in writing, you are keeping the channels of communication open with your client, which gives your business more opportunities to meet the client's needs and address concerns before problems escalate and become Errors and Omissions-related lawsuits.
#2: Assess Your Exposure
Assess your E & O exposure.
Even after you've completed work for a project, a client could sue your business for professional liability months down the road, depending on your state's statute of limitations. That's why it's important to make sure you have adequate Errors and Omissions Insurance and that you keep your policy in force throughout the life of your company. Most E & O policies are "claims-made" policies, which means your E & O Insurance has to be in force both at the time of the incident and when the claim is made. If someone files a lawsuit against your consulting business, claiming you were professionally negligent, provided incomplete or incorrect work, made mistakes or oversights, or failed to perform professional duties, this coverage ensures you will have the funds for attorney's fees, court settlements, and more.
#3: Prepare for the Worst
Prepare for worst-case scenarios.
Errors and Omissions lawsuits aside, there are plenty of other unforeseen events and accidents that could financially compromise your business. That's why it's also a good idea to have a plan in place if disaster strikes. Your strategy may include keeping multiple copies of records, contracts, and data. You'll also want to maintain a list of your company's important contacts, such as clients, contractors, and your insurance agent. Independent consultants will also benefit from insuring their office equipment against damage, theft, or malfunction through a Property Insurance policy. If a fire or tornado destroys your office, this policy can help you replace your company assets and get back to serving your clients quickly.
#4: Protect Your Employees
Protect your employees.
The office may seem insulated from safety hazards, but when it comes to protecting your employees, it's best to always take the extra step in creating a safe work environment. This may include investing in ergonomic office furniture and equipment to reduce the risk of your employees sustaining repetitive motion injuries. You may also want to conduct training sessions on how to properly lift and carry heavy boxes or equipment to prevent back injuries. Additionally, your state may also mandate that your business carry Workers' Compensation Insurance for your employees. Should one of your employees suffer a work-related injury or illness, your coverage provides funds for your employee's medical expenses, foregone income, and the legal fees to defend your business in court if your employee sues.
#5: Know Your Policy
Know your policy.
All insurance policies come with their own set of exclusions, so it's important that you read the fine print and fully understand the protection your policy offers. You don't want to file a claim only to find your policy doesn't cover it. If you are concerned that your policy's limits aren't enough to adequately protect your business, you may look into purchasing Umbrella Liability / Excess Liability coverage. This affordable option can extend the limits of both your General Liability and Employer's Practices Liability policies for a single premium. Your insureon agent can help assess your business's needs and find the coverage options that make sense for your consulting company.
Business Protection for Your Consulting Firm
Successful risk prevention also involves a business insurance policy that can act as your safety net should the unexpected occur. Even the best safety measures and precautions cannot fully defend against the unpredictability of human behavior and accidents. To give your business reliable financial protection against events outside of your control, contact an insureon agent today. We can help you determine the policies that safeguard your marketing or management consultation business.