If youâre a marketing consultant, you probably have at least one client company that requires you to carry some type of insurance. Maybe you run a small marketing or market research firm with a few employees, or maybe youâre an independent Internet marketing consultant or media professional. Regardless, you might wonder: Is all this insurance for marketing consultants really necessary?
If your client says you need it, you know you have to get it to secure the work. The good news is, in the majority of instances, getting the required marketing consultant insurance coverage can be both affordable and healthy for your business.
In general, client companies want their marketing consultants, researchers and media professionals to carry some or all of the following three types of coverage:
General liability insurance
General liability insurance covers injury to people or damage to property. To marketing consultants, insurance like this may seem unnecessary. After all, whatâs the likelihood that someone leading a meeting or presenting slides will damage a clientâs property or hurt someone?
The fact is, a lot of companies require any vendors who may come on-site â from network technicians to market researchers, media professionals and Internet marketing consultants â to prove that they have general liability insurance. In most cases, the clientâs risk managers drive the mandate, seeking to reduce the companyâs risk of financial losses from lawsuits.
Additionally, general liability insurance reduces marketing consultantsâ liability in the event of accidents at their own offices. If a client injures himself when he trips over the rug in your officeâs entryway, your general liability insurance should cover any related financial liability â and could save your business relationship with that client.
Professional liability insurance
Professional liability insurance, also known as errors and omissions or E&O insurance, is like malpractice insurance for marketing consultants, protecting you in the event of errors and omissions made by you or your employees. Clients require it for a good reason: People make mistakes.
Your clientâs greatest risk in bringing you in as a marketing consultant is that any error or oversight on your part could spark a lawsuit or financial loss. Having this type of insurance can substantially reduce marketing consultantsâ liability.
Letâs say you develop an advertising campaign that youâre sure will win your client new business. Instead, some existing customers find the campaign offensive, sparking a backlash that results in lost business for your client. Your client can claim that youâre responsible for any resulting financial losses and could sue you for compensation.
Professional liability insurance is a good idea for any marketing or media professional. Without it, your legal defense could be expensive enough to sink your business. Sometimes, all it takes is a misunderstanding, and you can be hit with a lawsuit. After a client alleges that you were negligent and communications begin to break down, your legal expenses rise exponentially.
To get answers about the right amount of coverage for E&O, marketing consultants should seek out a reputable insurance agency that can assess the businessâ level of risk.
Workersâ compensation insurance
Workersâ compensation insurance can be one of the more confusing types of coverage, largely because some states require it while others donât. If your clientâs home office is located in a state that requires it, you could be asked to carry it, even if itâs not a requirement in the state where you do business.
Why do clients insist on workersâ compensation insurance for marketing consultants? In some states, if youâre injured while under contract, your client must cover you with its own workersâ compensation policy. And, in some states, your clientâs insurance carrier may require its customers to cover all contractors that donât show their own proof of coverage. In both cases, your clientsâ premiums go up.
In the event of on-the-job injuries, workersâ compensation insurance pays for medical expenses as well as disability and compensation. If youâre a solo marketing consultant or media professional, and you have your own health insurance policy, workersâ compensation insurance may be unnecessary â but your client may require it nonetheless.
If your marketing consultancy does have employees, protecting them with workersâ compensation insurance is just a wise idea. Whether itâs repetitive stress injuries due to typing or a sprained ankle from a fall on a slick break room floor, even the smallest on-the-job hazards could result in injuries that could take your people off the job. Workersâ compensation insurance gives you peace of mind that your employees are taken care of, and saves your marketing consulting company the cost of any ongoing medical care.
James Cochran is the founder of Business Insurance Now, a company committed to providing quality professional liability insurance to small businesses. Jim has been actively involved in the industry for over a decade and understands the value that general liability insurance has for consulting companies.
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Tags: Consultants, Insurance, Liability, Marketing, Professional, Requirement