Cyber insurance for consultants

Cyber insurance safeguards your consulting business when sensitive data is stolen or compromised. If a hacker steals Social Security numbers, credit card numbers, or other personal information, you could be held liable. Cyber insurance can cover expenses from a client lawsuit and other costs related to the breach.

After a data breach or cyberattack, this policy can help pay for:

• Customer notification expenses
• Fraud monitoring services for affected clients
• Legal costs from a client’s lawsuit

Consulting firms help businesses by providing strategies and advice. However, consultants must navigate their own cybersecurity risks on behalf of themselves and their clients.

Certain consultants, such as IT consultants, face an additional level of risk compared to most professionals. They can be held liable if their clients' information is compromised, or if they mistakenly give advice that doesn't prevent a cyberattack on those they consult.

To protect against this, there are two kinds of cyber insurance: first-party and third-party.

First-party cyber liability insurance covers data breaches at your own business. For example, a hacker could steal clients’ Social Security numbers from an HR consultant’s database. First-party cyber can cover expenses related to:

• Notifying clients or customers about the breach
• Credit monitoring services for affected clients
• Cyber extortion demands

When a client suffers a data breach or cyberattack, you could face a lawsuit if they believe you were negligent in preventing it. For example, a marketing consultant could recommend insecure software to a client who later suffers a breach and sues their business.

Third-party cyber liability insurance protects your business from expenses related to a client’s lawsuit, such as:

• Attorney’s fees
• Court costs
• Settlements or judgments

IT consultants and other consultants who work in the technology industry can sometimes bundle third-party cyber insurance with professional liability insurance (also called errors and omissions insurance or E&O). Both policies protect against accusations of negligence.

In this industry, tech professional liability insurance bundled with cyber coverage is more commonly referred to as a package called technology errors and omissions insurance, or tech E&O.

Cyber insurance provides crucial protection for companies that handle sensitive data, but it doesn't cover bodily injuries, property damage, and other common risks. Other recommended policies for consultants include:

Professional liability insurance covers legal costs related to business mistakes or decisions that resulted in revenue loss and legal action by a client. It's sometimes referred to as errors and omissions insurance (E&O).

General liability insurance helps you navigate expenses related to common accidents, including third-party injuries, accidental damage to client property, and advertising injuries.

Business owner’s policy (BOP bundles general liability coverage with commercial property insurance, typically at a lower rate than if the policies were purchased separately.

Workers' compensation insurance covers medical costs if a consultant suffers a work-related injury, such as tripping in the office and breaking a wrist. Most states require this coverage for businesses with employees.

Commercial auto insurance provides support with costs in the event of an accident involving your consulting business's vehicle. Most states require this coverage for vehicles owned by a business.

Fidelity bonds reimburse you if one of your employees steals from a client. They are often required for client contracts.

Are you ready to protect your consulting firm with cyber insurance or another policy? Complete Insureon’s easy online application today to compare quotes from top U.S. insurers. Once you find a policy that fits your needs, coverage can start in less than 24 hours.