When you provide environmental consulting services, you perform a key role in helping companies manage their environmental impact, maintain health and safety, and comply with legal regulations. No matter how conscientiously you carry out your work, there is still a possibility that a mistake could be made, or a client could perceive an error in your work even where none exists. If that happens, you could be sued. In addition to these professional risks, there are common risks that exist for all companies, such as the risk of theft or a fire at your offices, or an accident that occurs at your workplace.

It’s critical to consider business insurance coverage to protect your firm from the many risks of doing business. Purchasing a comprehensive insurance package that is targeted to your firm’s specific exposures is an important step in securing your company’s financial future in the face of an unexpected disaster or lawsuit.

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

There are many types of insurance available, but the following types of coverage are particularly important for environmental consultants:

Errors and Omissions Insurance

As an environmental consultant, your clients rely on you to provide them with accurate environmental assessments and guidance. If they believe that you made a mistake in your work or were negligent in your services, they could sue you for damages. For clients, the consequences of poorly made environmental business decisions could mean severe penalties from regulators or costly cleanup efforts. This is why errors and omissions insurance is a critical coverage for environmental consultants. E&O insurance can protect your company from the risk of lawsuits brought on by clients alleging failures in services, advice, or professional work.

Example:

• An industrial manufacturer hires you to perform an evaluation of their chemical storage tank system and determine whether they are in compliance with local regulations. Soon after your evaluation, the company discovers that one of the tanks is leaking and contaminating the environment. They sue you claiming you should have identified the issue. Your insurer would pay for your legal defense and any settlements.

Commercial Property Insurance

Commercial property insurance covers the value of your business’s property, including leased or owned office space, furniture, equipment, computers, and other property. If an unexpected disaster occurs at your offices, repairing or replacing your damaged property can be costly. Commercial property insurance can help your company recover by providing funds to address property damage. Commonly covered causes of loss include fire, storms, hail, explosion, water damage, and vandalism.

Example:

• Lighting strikes the roof of your office building, causing a small fire to break out. Your roof is damaged and must be repaired before you can work in your offices again. Your insurer would pay for the repairs.

General Liability Insurance

General liability insurance is one of the most commonly purchased business insurance coverages, providing protection against third-party bodily injury, property damage, personal injury, or advertising injury. This coverage can protect your environmental consulting firm if a non-employee is accidentally injured while on your property or someone else’s property is damaged. In addition to bodily injury and property damage, general liability insurance includes a personal and advertising injury component, which covers risks including libel, slander, and copyright infringement. Your insurer will cover legal fees and settlement costs if you are sued for any of these reasons.

Example:

• Bodily injury: An electrician comes to your offices to outfit a new electrical panel. She slips on some wet flooring in your hallway and falls, fracturing her wrist. Your insurer would pay for medical costs and legal fees if the electrician sues.
• Property damage: Your environmental consultants visit another company’s production center to conduct an environmental assessment. One of your employees accidentally damages the company’s 3D printer. Your insurer would cover the damages.
• Personal and advertising injury: Your company develops a new ad campaign that unintentionally uses imagery that looks very similar to drawings by a professional illustrator. The illustrator sues your firm for copyright infringement. Your insurer would cover the lawsuit and any settlement that results.

Business Owner’s Policy

A business owner’s policy combines general liability, property, business income, and extra expense coverage into a single package. This can be a convenient and cost-effective way for small and midsize businesses to obtain a wide range of insurance coverage while saving money on premiums. Requirements to qualify for a BOP 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:

• An overloaded circuit starts an electrical fire in your offices, damaging the building as well as valuable computers and equipment. The commercial property portion of your business owner’s policy will pay for the cost to repair the building and replace computers and other damaged items.

Additional Coverage

• Employment practices liability insurance protects your business if current, former, or prospective employees sue you with accusations of wrongful treatment. Common claims include discrimination, harassment, wrongful termination, or other employment-related issues.
• Cyber liability insurance protects your company from the financial losses associated with data breaches, hacking, cyberextortion, viruses, and other cyber threats.
• Business income 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.
• Workers’ compensation insurance is legally required for companies with employees in most states. It covers the medical expenses and lost income of employees who are injured or fall ill while working, and it can also provide benefits to dependents of an employee that suffers a work-related death.

Final Word

When your company provides environmental consulting services, you open yourself to a variety of professional risks, as well as risks that are common to most companies. Lawsuits brought by unhappy clients, physical damage caused by a disaster such as a fire, and an injury that takes place on your property are all unfortunate events that could have a major impact on your business. Purchasing the right insurance policies for your company’s needs can provide you with the necessary financial protection that will allow you and your clients to guard against such risks and feel confident that your company will be able to survive an unexpected disaster.