From a financial and legal standpoint, professional consultants face various unique areas of risk. It’s usually necessary for these professionals to use tailored insurance policies to protect against professional liability claims. Still, even a policy geared towards consultants may neglect certain areas of risk. Consultants should try to avoid settling for a policy that doesn’t offer coverage for the following two issues.
1. Cyber Security
Since most consultants work with sensitive company data, security issues can be a significant area of risk. Network breaches and other cyber issues can result in leaked business plans or the loss of sensitive personal information, leading to professional liability claims. Consultants who work in fields such as IT or data processing should especially make sure to carry this coverage, since their analysis and advice could also lead to cyber liability issues.
2. Privacy Issues
Consultants may also face exposure to privacy violations that arise either while they perform their services or because of their recommendations. In the field of healthcare, breaches of HIPAA compliance can be especially costly and damaging to the client, increasing the likelihood of a claim being made. Even in other industries, the exposure of sensitive employee or client information — from financial information to medical records — is an important risk to address.
Ensuring Full Protection
Consultants should keep these risks in mind, but they should also make sure to work closely with an insurance agent when choosing a professional liability insurance policy. Since there are various services consulting professionals may offer, customized insurance coverage is usually needed to guarantee full protection.