In prior posts on the topic of Launching a Consulting Business we began covering the necessary (but boring) stuff that must be in place (legal and accounting) to properly manage the business and mitigate the inherent risks.
We’ll now address the final topic (that I plan on covering, related to “the boring stuff”).
There are a number of insurance coverages that you’ll want to consider, including:
- Health, Dental, Life and Disability
- Professional Liability / Errors and Omissions
- Other policies and/or riders which may be specific to your industry or the services you deliver
- Workers’ Compensation
Health, Dental, Life and Disability
You’ll obviously want to continue covering yourself and your family in areas that may have been provided and/or subsidized by your employer. And, you’ll want to set this up BEFORE you make the final decision to announce your departure from corporate employment, as there are many cost implications to consider.
A key lesson learned for me: I had initially acquired my health and dental insurance through a small business association as, at the time, this “seemed” to be the most cost-effective manner for doing so. And, I was complacent for a number of years thinking it was my only option. As these insurance-related costs continued to dramatically increase they reached a point (a.k.a. level of pain) when I decided to investigate other options. I was pleasantly surprised to learn that I could get much better coverage at a much lower cost.
Bottom-line: Do your research and the math.
Professional Liability / Errors and Omissions
As the name would suggest, this coverage protects your business from “mistakes” that may be made in the delivery of your services.
You may find that some of your clients will require a certain level of coverage in this area in order to engage you.
And, depending on the nature of services you deliver and/or the industry you deliver them within, there may be other policies and/or riders you will want to have in place.
This policy applies once you have engaged other resources to be on your team (subcontract and/or employees) and can vary from state-to-state. You are encouraged to discuss the need for this policy with your Legal Counsel and CPA.
In closing, these “boring” topics are absolutely crucial to mitigate the inherent risks that exist in business. In these last few posts I’ve merely shared a punch-list of things for you to address as you prepare to launch your business along with some of my own experience and observations.
In a future post we’ll get back to more of the fun (business-building) stuff that I REALLY enjoy talking about 🙂 We just had to get this “boring” stuff out of the way before you get too far down the path…
DISCLOSURE: I am not qualified to provide legal, accounting or insurance-related advice. What I am suggesting here is: you must get some!