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Consultants "by necessity" need professional liability coverage

Many of today's independent consulting firms are founded by professionals unable to find other employment. Insuring these professional firms can pose a challenge for insurance agents.

By Nancy ,ERMond | Updated on February 23, 2010
In today’s complex business environment, no consultancy should go without professional and general liability coverage. Many professional firms are founded today out of necessity – the firm’s founder lost his or her job and in this difficult economy, can find no other employment. They apply their expertise and open a consultancy, often out of their homes or in an office suite. This means a tight budget. Insurance is one of the areas where an entrepreneur may try to cut costs.

Insuring professional firms poses challenges for insurance agents. To protect the business, an agent evaluates all the exposures the business faces. He or she then offers solid coverage solutions to close gaps between policies and avoid coverage issues should a claim arise. Read AA&B‘s Web exclusive “Place professional liability in tough times.”

The professional liability policy versus commercial general liability (CGL) coverage

It is easy for an agent to convince a consultant he or she needs professional liability. The consultant and its employees provide a service or offer advice. What if that repair or advice is faulty? Any professional consultant needs professional liability coverage, also called errors and omissions.

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