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As a market research consultant, you and your firm face a number of business risks and liabilities, most notable of which is professional liability. Clients rely on you to provide key data and findings to help them make major business decisions, and if there are mistakes in your work or you fail your client in any way, a client could hold you liable and sue for damages. In addition to professional risk, your company could experience unexpected disasters that could affect any company, such as a fire that damages your property or a workplace accident or injury.
It’s important to consider purchasing business insurance coverage to financially protect your company from these and many other risks, whether it’s a physical disaster, a lawsuit, or an accidental injury. Having the right insurance coverage can help your company weather any unforeseen setbacks and provide you and your employees with much needed financial support.
What insurance coverage do I need for my market research consulting company?
While there are many types of coverage for companies to consider, these insurance policies are particularly important for market research consulting firms:
Errors and Omissions Insurance
Your clients rely on you to provide them with accurate data and analyses that they can use to plan marketing strategies, product launches, and more. A client could lose significant amounts of money if an advertising plan doesn’t have the expected results or a new product fails to sell. In these situations, it’s possible that clients could claim that you caused their financial losses by providing poor information or faulty research. Regardless of whether you truly made a mistake, lawsuits can be very expensive and damaging for your company. Errors and omissions insurance can provide financial protection in the event that you are sued by a dissatisfied client.
- A client hires you to help them understand what region to focus on when they launch their new juicer product. After performing research, your firm recommends that they focus their efforts in the northeast region of the U.S. Sales are abysmal, and the company suffers significant losses. They sue you, claiming that your firm was negligent in its research.
Commercial Property Insurance
Commercial property insurance protects the value of the property your business relies on, whether it’s a building, computers, furniture, equipment, or other items. If an unexpected disaster damages your office building, it can be difficult and expensive to recover from the loss on your own. Commercial property insurance can help by providing funds to replace or repair damaged business property in the event of a fire, storm, explosion, or other covered peril.
Commercial property insurance covers the following:
- Buildings belonging to or leased by your company
- Contents of the building, including computer equipment, office furniture, and artwork
- Property of others while it is under your care, custody, or control
- A summer wildfire roars through your area, destroying hundreds of structures, including your office building. The building is a total loss, and everything from your office furniture to your computer equipment is destroyed. Commercial property insurance would provide the funds to rebuild your office building and replace your office equipment.
General Liability Insurance
General liability insurance is a foundational policy that most businesses will carry as all companies are at risk of accidental injury. Your market research consulting firm may host clients at your offices, visit clients at their location, hold focus groups on your property, or otherwise come into contact with third parties. This means that there’s always a chance that someone could be unintentionally injured or their property could be damaged. In addition to covering third-party bodily injury and property damage, general liability insurance also covers personal and advertising injury, which can include unintentional, non-physical injuries such as libel, slander, and copyright infringement.
- Bodily injury: Your firm holds a focus group at your offices. One of the participants slips on an unsecured rug and falls, sustaining a head injury. Your general liability insurance would pay for the participant’s medical expenses and for your legal costs if the participant decides to sue.
- Property damage: One of your employees visits a client’s office to discuss a market research project for a new product. He accidentally knocks over an expensive decorative vase, destroying it. Your insurer would cover the damages.
- Personal and advertising injury: Your firm creates a new logo for use in marketing materials. The logo looks very similar to another company’s logo, and the other company sues for copyright infringement. Your insurer would provide funds to defend the lawsuit and pay any settlements or judgments against you.
Business Owner’s Policy
If you run a small or midsize firm, you may want to consider a business owner’s policy (BOP) for a broad range of coverage. This type of insurance combines general liability, property, business income, and extra expense coverage together in a single package. A BOP can help smaller companies pay less in premiums while obtaining a wide range of coverage since the cost for a BOP is typically lower than the price of buying each policy individually. Requirements to qualify for a BOP can vary depending on the insurer, but usually, 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.
- During a severe windstorm, a redwood tree falls onto your office building’s roof, damaging it. The commercial property portion of your business owner’s policy would pay for repairs.
- Cyber liability insurance protects your company from financial losses resulting from data breaches, hacking, cyberextortion, viruses, and other cyber events. This is an important coverage to consider for companies that rely on electronic data or store confidential or sensitive information.
- Employment practices liability insurance protects your business against lawsuits by employees accusing your business of wrongful treatment such as discrimination, harassment, or other employment-related issues.
- Workers’ compensation insurance is legally required for companies with employees in most states. It covers employees’ medical expenses and lost income if they are injured while working, and it can also provide benefits to an employee’s dependents in the case of a work-related employee death.
- 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.
Your market research consulting firm could be held liable for a variety of risks, from physical dangers such as fires and storms to lawsuits brought by dissatisfied customers. As part of an overall risk management plan, it’s important to obtain a comprehensive set of insurance policies that will financially protect you in the event of an unforeseen disaster or lawsuit. When you have the right insurance for your business’s needs, you and your clients will feel confident in the knowledge that your company would be able to cope with any major incidents that arise.