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  • Risk Management for Consulting Firms
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    What is Business Interruption Insurance?

    As a consulting firm, clients are paying you for your lifetime of knowledge and your unique skills. Consulting is very personal in that way. So, if something happens to you, such as an accident or major illness, you can’t simply pull someone else in to take over. If an event is severe enough that you can’t continue working, your income will stop while the expenses keep going, and possibly even increase. Business income insurance can help cover your lost income and additional expenses.

    Business Interruption Insurance helps replace lost income and can help cover additional expenses if a business is affected by a covered disaster. Business interruption insurance, also known as business income insurance, can help your business pay bills, replace income and cover payroll expenses when your business is forced to close temporarily.

    Business interruption insurance works in conjunction with commercial property insurance and can help cover costs if your business is forced to move, close or rebuild in the event of a disaster, such as a fire. Business interruption insurance can help cover:

    • Taxes
    • Payroll
    • Utilities
    • Lost profits
    • Advertising
    • Mortgage/Rent
    • Relocation Expenses

    Who Needs Business Interruption Insurance?

    If your business relies on a physical location, property or equipment to generate income, you may want to consider adding business income insurance to your business owner’s policy. Many businesses benefit from adding this additional coverage to their policy, including software companies, service businesses, retail stores, and businesses, as well as consulting firms.

    Mitigation Measures for Consulting Firms

    Aside from taking care of your health and being careful to limit the risks from those extreme sports ventures, your primary protection against loss of business is disability insurance. There are two types to consider, and you may want to carry both for the most complete protection:

    • Short-Term Disability Insurance (STD). Short-term disability insurance policies pay benefits for short periods of time—typically three months, six months, or one year, after a brief waiting (elimination) period. Short-term disability insurance can be expensive to purchase as an individual, but group plans are less costly than long-term group plans.
    • Long-Term Disability Insurance (LTD). Long-term disability insurance has an elimination period of at least 90 days. After that, benefits are paid for a longer term, typically, two years, five years, 10 years, to age 65, or for life, depending on the policy. The more extended the benefit period, the higher the premium.

    Get business insurance. At a minimum, it is prudent for any small business to have a Business Owner’s Policy. However, because there are unique risks that come with running a business, consultants would be wise to consider additional coverages. This consulting industry page can help you learn about the types of insurance consulting firms typically use to protect their businesses.

    Need Business Insurance?

    For more than 200 years businesses have trusted The Hartford. We can help you get the right coverage with an online quote.