Coverages You’ll Encounter (and Which You Likely Need)

A. General Liability (GL)

What it covers

 Third-party bodily injury, property damage, and personal/advertising injury arising from your operations (e.g., someone trips over your cable during a workshop).

Typical limits / deductibles

• $1M per occurrence / $2M aggregate is common for consultants.
• Usually no deductible for bodily injury/property damage; small deductible possible for property damage.

Key exclusions / pitfalls

• No coverage for your professional advice (that’s E&O).
• Contractual liability beyond “insured contracts” may be excluded.
• Electronic data losses, intellectual property, and employment claims excluded.

Scenarios

• On-site facilitation; trade-show booth; client visitor slips in your office; damage to a client’s property.

Solo vs. boutique

• Solo: GL at $1M/$2M, often packaged inside a BOP.
• Boutique: Same base, add Additional Insured / Primary & Noncontributory / Waiver endorsements for client contracts; consider an Umbrella.

B. Professional Liability (Errors & Omissions, E&O)

What it covers

Claims alleging negligent professional services or advice that cause client financial loss (missed SLAs after your redesign, flawed analytics, misstatement in a report).

Typical limits / retentions

• $1M per claim / $1M–$2M aggregate for solos; $2M–$5M+ for boutiques or higher-risk industries.
• Retention (SIR) or deductible: $2.5k–$25k typical; defense costs usually inside limits.
• Claims-made with a retroactive date; maintain prior-acts continuity.

Key exclusions / pitfalls

• Intentional wrongdoing, warranty/guarantee of outcomes, broad contractual liability, IP and privacy unless endorsed, insured-vs-insured, prior knowledge.
• Ensure “professional services” definition matches what you actually do.

Scenarios

• Operating model redesign harms throughput; strategy recommendation triggers costly pivot; data analysis error.

Solo vs. boutique

• Solo: $1M; keep retention low enough for cash flow.
• Boutique: $2M–$5M; consider Excess E&O; add tech, media, privacy endorsements if relevant; panel counsel terms matter.

C. Business Owner’s Policy (BOP)

What it covers

 Bundled GL + Commercial Property (office contents, tenant improvements) with extra bells (business income/extra expense).

Typical limits / deductibles

• GL commonly $1M/$2M.
• Property limits to your contents value (e.g., $25k–$250k). Deductibles typically $500–$1,000.
• Business income for 12 months is common.

Key exclusions / pitfalls

• Professional liability, cyber, EPLI, flood/earthquake excluded. Property sublimits for off-premises gear may be tight.

Scenarios

• Starter policy for small offices; laptops, furniture, and GL in one.

Solo vs. boutique

• Solo: Cost-effective foundation; add riders as needed.
• Boutique: Works for small offices; if distributed/remote, ensure off-premises coverage or add Inland Marine.

D. Cyber Liability

What it covers

• First-party: Forensics, notification/credit monitoring, data restoration, business interruption, cyber extortion.
• Third-party: Liability for privacy breach, network security failures, media violations.
• Often includes incident-response vendors (legal, forensics, PR).

Typical limits / retentions

• $250k–$1M for solos; $1M–$5M+ for boutiques/regulated data.
• Retentions $2.5k–$25k+. Claims-made.

Key exclusions / pitfalls

• Lack of basic controls (e.g., no MFA) may bar quotes or trigger restrictive terms.
• Prior known incidents, war/terrorism, failure to maintain minimum security standards, contractual fines, certain regulatory penalties.
• Social engineering/funds transfer fraud often sublimited unless specifically endorsed.

Scenarios

• Phishing compromise of O365/Google Workspace; lost laptop with PII; ransomware; breach via client portal access.

Solo vs. boutique

• Solo: $250k–$1M; confirm vendor flexibility and panel counsel.
• Boutique: $1M–$5M; add social engineering, vendor-caused breach, PCI, and Breach of Contract carve-backs where possible.

E. Media/IP Liability (sometimes part of E&O or Cyber)

What it covers

 Defamation, copyright/trademark infringement, personal injury in content (websites, blogs, reports, marketing).

Typical limits / retentions

• $250k–$1M, often as an endorsement; retention $2.5k–$10k. Claims-made.

Key exclusions / pitfalls

• Patent infringement usually excluded; knowing falsity; failure to obtain releases; prior publications.

Scenarios

• Using an unlicensed image in a slide; comparative blog post draws a defamation claim.

Solo vs. boutique

• Solo: Add as endorsement to E&O or Cyber.
• Boutique: Dedicated media form if you publish frequently or produce client-facing content at scale.

F. Workers’ Compensation (WC)

What it covers

 Statutory benefits for employee injuries/illnesses arising out of employment (medical, wage replacement).

Typical limits / deductibles

• Statutory; employers’ liability is often $100k/$500k/$100k or $1M.
• No deductible in most small accounts.

Key exclusions / pitfalls

• Independent contractors are usually not covered; misclassification can create exposure.
• Multi-state/remote employees require correct state endorsements.

Scenarios

• Employee trips at a client site; repetitive stress injury from travel/laptop.

Solo vs. boutique

• Solo: Often not required with no employees, but check state rules (some require even 1 part-timer).
• Boutique: Required in all employee states; coordinate with any PEO.

G. Employment Practices Liability Insurance (EPLI)

What it covers

 Claims alleging discrimination, harassment, wrongful termination, retaliation, failure to hire/promote. Optional third-party coverage extends to allegations from clients/vendors.

Typical limits / retentions

• $250k–$1M limits typical for small firms; retention $5k–$50k; claims-made.

Key exclusions / pitfalls

• Wage & hour typically excluded or sublimited for defense only; ERISA violations excluded (that’s Fiduciary).
• Intentional wrongdoing excluded.

Scenarios

• Former analyst alleges wrongful termination; consultant harassed by client manager (third-party EPLI responds).

Solo vs. boutique

• Solo: Not needed without employees.
• Boutique: Recommended once you hire; add third-party coverage.

H. Commercial Property (standalone)

What it covers

 Owned/leased contents, tenant improvements, sometimes building (if you own it), plus business income.

Typical limits / deductibles

• Set to replacement cost of contents/TIs; deductibles $500–$2,500.
• May be bundled in a BOP.

Key exclusions / pitfalls

• Flood/earthquake excluded; off-premises coverage limited; valuation issues if you under-report.

Scenarios

• Office fire/water damage; power surge fries equipment.

Solo vs. boutique

• Solo: Often satisfied via BOP.
• Boutique: Separate property policy if larger office or building ownership.

I. Hired & Non-Owned Auto (HNOA)

What it covers

 Liability for auto accidents involving rented or employee-owned vehicles used for business. (You have no company-owned fleet.)

Typical limits / deductibles

• Typically $1M CSL (combined single limit).
• Often added to GL/BOP; small/no deductible.

Key exclusions / pitfalls

• Physical damage to the hired auto is separate (consider Hired Auto Physical Damage).
• No coverage for owned vehicles (that requires a Business Auto policy).

Scenarios

• Employee uses personal car for client meeting and causes an accident; firm is named.

Solo vs. boutique

• Solo: Add HNOA if you rent cars or drive for business.
• Boutique: Standard; umbrella usually sits over HNOA.

J. Umbrella / Excess Liability

What it covers

 Additional limits sitting over GL/HNOA (and sometimes Employers’ Liability). Separate Excess E&O is different and not automatic.

Typical limits / deductibles

• $1M–$5M typical starting points; attachment over scheduled underlying policies.

Key exclusions / pitfalls

• Does not automatically sit over E&O/Cyber; you need Excess E&O/Cyber separately.
• Must maintain underlying limits/terms.

Scenarios

• Catastrophic injury at a large event you’re facilitating; severe third-party auto loss.

Solo vs. boutique

• Solo: Optional unless contracts require.
• Boutique: Common at $1M–$5M for enterprise clients/venues.

K. Crime / Fidelity (incl. Social Engineering & Funds Transfer Fraud)

What it covers

Employee theft, forgery/alteration, computer fraud, funds transfer fraud, and sometimes social engineering (fraudulent instruction).

Typical limits / deductibles

• $100k–$1M limits; deductibles $1k–$25k.
• Social engineering often sublimited (e.g., $100k) unless increased by endorsement.

Key exclusions / pitfalls

• Voluntary parting without proper verification is often excluded unless endorsed.
• Coverage can require call-backs / dual approval procedures—meet them.

Scenarios

• AP wires to fraudulent “vendor”; staffer embezzles client pass-through funds.

Solo vs. boutique

• Solo: Consider if handling client funds or at contractual request.
• Boutique: Increasingly required by clients; add social engineering.

L. Inland Marine / Equipment Floater

What it covers

Movable property and gear off-premises (laptops, cameras, demo equipment) and in transit.

Typical limits / deductibles

• Schedule items or blanket (e.g., $25k–$250k); deductibles $250–$1,000.

Key exclusions / pitfalls

• Wear/tear, unexplained disappearance without proof, dishonest acts; sublimits for unattended vehicles.

Scenarios

• Laptop stolen at hotel; projector damaged during travel.

Solo vs. boutique

• Solo: Add if you travel with gear.
• Boutique: Standard for distributed teams; pair with device encryption for cyber.

M. Fiduciary Liability / ERISA Bond

What it covers

• ERISA fidelity bond: Required if you or your firm handle plan assets (e.g., 401(k)); protects the plan against theft by plan officials.
• Fiduciary liability: Covers breach of fiduciary duty claims in managing benefit plans (investment decisions, fee disclosures).

Typical limits / deductibles

• ERISA bond: At least 10% of plan assets (min $1,000, typically up to $500k/$1M for plans with employer securities).
• Fiduciary liability: $250k–$1M+; retention $5k–$25k; claims-made.

Key exclusions / pitfalls

• ERISA bond is not the same as fiduciary liability; you may need both.
• Known wrongful acts excluded.

Scenarios

• Late remittance of employee deferrals; alleged imprudent investment options.

Solo vs. boutique

• Solo: If no benefit plan, usually N/A.
• Boutique: Needed once you sponsor a 401(k) or similar.

Which Policies Do Most Consultants Actually Carry?

• Baseline for many solos: E&O + GL (via BOP) + Cyber, often HNOA; add Inland Marine if traveling with gear.
• With employees: Add WC + EPLI; consider Crime (with social engineering).
• With larger contracts/events: Consider Umbrella; increase E&O/Cyber limits; review client-specific endorsements.
• With a 401(k): Add ERISA bond and consider Fiduciary liability.

Setting Limits & Retentions (Fast Heuristics)

• Start with the largest client requirement; it often sets your floor.
• If defense costs are inside limits (E&O, Cyber), lean higher.
• Balance retention with cash flow: choose the highest retention you can comfortably fund in 7–14 days.
• Use Excess layers when primary quotes jump disproportionately.

Common Endorsements to Ask For

• Additional Insured / Primary & Noncontributory / Waiver of Subrogation (GL/HNOA; sometimes E&O by manuscript).
• Worldwide coverage with suits brought in the U.S. (E&O/Cyber if you work internationally).
• Prior acts / Retro date continuity (claims-made).
• Third-party EPLI (allegations involving client personnel).
• Social Engineering (Crime); Breach of Contract carve-back (E&O); Contingent BI and Bricking (Cyber, where available).

Red Flags That Mean “Re-read the Form”

• E&O definition of professional services is too narrow or excludes your key service line.
• Cyber requires controls you don’t have (MFA, backups) or has a “failure to maintain” clause with no grace.
• Umbrella that doesn’t follow form over HNOA/GL or specifically excludes consulting exposures.
• BOP with tiny off-premises sublimits but your team is 100% remote.