Education consultants provide a variety of critical services. You may be involved with creating curriculums, helping parents and students obtain appropriate special education services, assisting high school students with their college application process, and more. As you build your business, it’s important to be aware of the liability risks associated with providing professional services. If your guidance and recommendations don’t have the desired result, you could be sued by unhappy clients. Additionally, every business owner faces common risks from unexpected incidents, such as an accidental workplace injury or a natural disaster.

Business insurance can help your consultancy cover a variety of risks, whether it’s from a physical disaster like a fire or theft or a lawsuit filed by a client. As you research which types of insurance may be best suited for your firm, remember that insurance is really an investment, not only in your business, but in yourself, your business partners, and your team.

What insurance coverage do I need for my education consulting company?

While there are many types of coverage for companies to consider, these insurance policies are particularly important for education consulting firms:

Errors and Omissions Insurance

Errors and omissions insurance is a key coverage for any company that provides professional advice and services. If a client isn’t satisfied with the results of your services and believes you have been negligent, they could file a lawsuit against you. Whether the claim is groundless or your team truly made an unintentional error, the costs of lawsuits and settlements are always rising. Errors and omissions insurance can provide financial protection that will enable you to defend a lawsuit and continue to focus on your business.

Example:

• A college preparation company hires your education consulting firm to help them revamp their curriculum and educational plans with the goal of raising test scores. After the new materials are implemented, test scores drop by several points and as a result, the company’s enrollment drops significantly. The prep company sues your firm for damages, claiming your team was negligent in its work. Your insurer would cover the lawsuit and any resulting settlements.

Commercial Property Insurance

Commercial property insurance is a critical coverage for firms that wish to financially protect their business property, including buildings, computers, equipment, furniture, and office supplies. Although it is particularly crucial for companies that own or lease office space, small firms that primarily work from home could benefit from this coverage as well, since business property is typically not covered by a homeowners or renters insurance policy. Commercial property insurance can help provide funds to replace or repair damaged business property in the event of a fire, storm, explosion, or other covered peril.

Example:

• While you are on vacation, someone breaks into your home offices and steals your work computer, printer, and other supplies. Your insurer would pay for you to replace the items.

General Liability Insurance

General liability insurance covers accidental damage or injury to third parties and third-party property. If your business unintentionally causes bodily injury to a non-employee or damages someone else’s property, general liability insurance will pay for legal fees and damages. It also covers personal and advertising injuries, which could include libel, slander, or copyright infringement. This coverage can provide financial protection if someone is harmed by your company and sues.

Example:

• An education consultant visits a student’s home to discuss college application strategies. The consultant accidentally spills coffee onto the student’s expensive computer, ruining it. Your insurer would pay for the machine to be replaced.

Business Owner’s Policy

For small and midsize education consulting firms, a business owner’s policy (BOP) could be a good way to achieve a broad range of coverage with lower premium costs. This type of insurance combines general liability, property, business income, and extra expense coverage together in a single package. There are specific requirements to qualify for a BOP; these can vary depending on the insurer. Typically, your company would be required to operate from a physical business location, employ fewer than 100 people, and make less than $5 million in sales per year.

Example:

• Your office building’s fire sprinkler system develops a leak, and the water damages the ceiling. The commercial property portion of your business owner’s policy would provide coverage to repair the damaged ceiling.

Additional Coverage

• Cyber liability insurance protects your company from financial losses resulting from data breaches, hacking, cyberextortion, viruses, and other cyber events. It can be expensive to recover from a cyber event, and if the incident compromises client data, you may face lawsuits from third parties. Cyber liability is particularly important for companies that rely on store sensitive, confidential, or personally identifiable information.
• Employment practices liability insurance protects your business against lawsuits by current, former, or prospective employees accusing your business of wrongful treatment. Common claims include discrimination, harassment, wrongful termination, or other employment-related issues.
• Workers’ compensation insurance provides medical and financial benefits for employees who suffer work-related injuries or illnesses or for their survivors in the case of an employee death. This type of coverage is crucial in protecting the safety and livelihood of your employees. Additionally, workers’ comp is legally required for companies who regularly employ others in almost all states.
• Business income insurance, also known as business interruption insurance, will reimburse you for lost income and operating expenses if your business is unable to operate due to a covered reason, such as fire, storm damage, or other property damage. This type of insurance is not sold on a standalone basis but can be bundled along with a commercial property insurance policy or included in a business owner’s policy.

Final Word

As you build your education consulting business, it’s vital to be ready for unforeseen events that could affect your company’s success. Whether it’s a physical hazard like a fire or storm or a lawsuit brought by an unhappy client or someone who was accidentally injured, there are many situations that could have a negative impact on your business. With a broad range of insurance coverage to provide financial support, you and your clients can feel confident that your business will be able to survive even if a damaging incident occurs.