Professional Liability Coverage - Critical for Consultants

Insurance consultant Wallace Clapp describes a "miscellaneous professional," a category that includes consultants, as "anyone who generates exposure to economic loss for others not involving direct bodily injury or property damage." That unique responsibility is exactly why errors and omissions insurance is so critical for the growing number of consultants who operate their own firms.

Miscellaneous E&O coverage, available from Stuckey & Company, is critical for management consultants, including:

• Strategic Consultants
• HR & Benefits Consultants
• Land Use Consultants
• Marketing Consultants
• Financial Consultants
• Project Managers

Consultant Market Growing Rapidly

Government economists predict the field of management consultants will grow faster than most other industries through at least 2016. According to the U.S Bureau of Labor Statistics, the average yearly income of management consultants in 2007 was $80,460, and the field is made up of many highly-educated and experienced professionals.

Clapp provides reasons for continued expansion of E&O insurance to this relatively new class of professionals:

• The U.S. has transformed from a manufacturing to a more service-oriented economy, creating opportunities for experienced professionals to consult on these services.
• Most management consultants are not required to pass any sort of special licensure exams, so there can be a wide range of talent and experience among different consultants - which amplifies the potential for exposure to companies that hire them.
• Many businesses now require consultants to carry professional liability insurance.
• Consultants are facing more exposure in our litigious society.

Consultants Need Professional E&O

Mistakes happen and can result in significant economic losses and expensive lawsuits. Clapp cites these examples:

• A utility company hired a consultant to handle customer accounts. The software did not work as promised and the utility sued, seeking $5 million to correct problems. The case settled for nearly $500,000.
• An advertising consultant was retained by a baby food company. Due to an error by the consultant, the wrong advertisements were televised. The baby food company demanded damages of $100,000 for advertising costs and lost revenue. The case was settled for $85,000 plus over $50,000 in legal fees.

Management Consultants Covered Under Miscellaneous Professional Liability from Stuckey & Company

Stuckey & Company offers coverage limits for many E&O risks up to $5MM through our Miscellaneous Professional Liability coverage. We have in-house quoting authority for accounts generating $6MM in revenue, and can deliver fast turnaround times for quotes/indications.