SECTION 1
Business Liability/E&O
⚠️ This article is for informational purposes only and does not constitute legal or insurance advice. We encourage you to shop around, compare quotes, and choose the policy that’s right for your work. Catalant is not a licensed insurer, producer, or broker.
The most relevant insurance for consultants is E&O, or Errors and Omissions coverage.
This type of insurance protects you in the event that a client claims your advice, deliverables, or analysis caused them financial harm. It’s designed for professionals who provide guidance or expertise, like consultants, lawyers, or financial advisors.
At the most basic level, this would provide coverage for you as a consultant in case any mistakes you make cause monetary damages to a client.
A dramatic (but illustrative) example:
Let’s say you advise Coca-Cola to sell the Diet Coke brand to Pepsi for $100.
A month later, they realize it was worth billions—and blame you.
E&O coverage could step in to help cover legal defense or damages.
In reality, E&O claims in consulting are rare. Most independent consultants never need to use their policy. But there are still two big reasons you might need it:
- Procurement requirements:
Large companies—especially Fortune 500s—often require independent contractors to carry E&O insurance, regardless of actual risk. - Peace of mind:
Even if your clients don’t ask, E&O gives you coverage in the event of a dispute—and can make you feel more secure delivering high-stakes work.
Pro Tip: You can buy an E&O insurance policy online in 10-15 minutes. For that reason, some consultants don’t buy E&O until they have a specific request from a client to show proof of coverage. Other consultants look for E&O insurance immediately. Your decision here should be up to your personal risk tolerance level.
SECTION 2
Popular E&O Providers
To help you get started, here are a few options other Catalant Experts have used to find coverage:
Berxi – Professional liability insurance for independents and small firms, part of Berkshire Hathaway Specialty Insurance.
Draftrs – Professional liability insurance for independents.
Most vendors follow a simple online quote process, just like the process of getting car or renter’s insurance. You’ll answer questions about your work, project types, and annual revenue to get a customized quote.
You can expect to pay approximately $50 per month for E&O coverage and for it to be issued immediately. That will give you proof of insurance you can provide the client.
Pro Tip: E&O coverage is dramatically more expensive if you are involved with M&A or Private Equity Acquisitions. If you do M&A work frequently, then it could make sense to answer “Yes” and get the more expensive policy. If you occasionally support M&A or PE projects, but it’s not your core focus, you may want to answer “No” to M&A-related questions during the application. You can always adjust coverage later if those types of engagements become more frequent.
SECTION 3
Cyber Liability Insurance
While less commonly required than E&O, some clients—especially in regulated industries—may ask for Cyber Liability Insurance as part of their vendor compliance process. This insurance is designed to cover losses related to data breaches, hacking, or exposure of sensitive client information via your systems.
This coverage could kick in if your computer gets hacked and the client’s sensitive information was therefore exposed.
When it’s most relevant:
- You handle sensitive personal data (e.g., healthcare, employee records, customer PII)
- You work with cloud-based client systems or shared file environments
- Your client’s procurement or IT department requires it as part of onboarding
This will be especially important if you work with sensitive data, like healthcare or employment records. In that case, expect to see cyber insurance requirements. In most situations, this coverage should cost approximately $50 per month as well.
SECTION 4
Final Thoughts
Business insurance isn’t just about protecting yourself—it’s also about being easy to work with.
For many large clients, having the right coverage is a procurement prerequisite. By proactively understanding what’s required (and having proof of coverage ready), you make it easier for clients to say “yes” to hiring you.
You don’t need to over-engineer your policy or overpay for bells and whistles. But you do need to know the basics—and where to go when the time comes.
Beyond business insurance, there are a variety of other business basics you’ll need to consider when setting up your independent consultancy, starting with managing your money. Learn more about business accounting and bookkeeping in the next article in this series.
Catalant encourages all Experts to shop around, compare quotes, and choose the policy that’s right for your work. Catalant is not a licensed insurer, producer, or broker.