Insurance for Consulting LLC?

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albireo13
Posts: 91
Joined: Wed Jun 24, 2015 6:35 am

Insurance for Consulting LLC?

Post by albireo13 »

Hi,
I just started a single-member LLC in order to do engineering consulting work. This will be part-time and mostly remote office work. I have a few potential clients I am talking with at the moment. I plan to obtain some form of Business liability insurance, $1M/$2M aggregate at least. It was also suggested that I consider Professional liability, as being more useful for consulting work. It is a bit more expensive and I would likely go for $1M coverage on that. I am unsure if that is necessary.

This is all pretty new to me and I was wondering if there is anyone else here who has had experience with this.
Any recommendations or advice?

Thx
sport
Posts: 10731
Joined: Tue Feb 27, 2007 3:26 pm
Location: Cleveland, OH

Re: Insurance for Consulting LLC?

Post by sport »

Do you have a Professional Engineer's license?
newkidontheblock
Posts: 241
Joined: Mon Apr 28, 2008 11:59 am

Re: Insurance for Consulting LLC?

Post by newkidontheblock »

Your client will have specific insurance requirements. There is no need to purchase professional liability insurance unless your client requires it.

I pay about $6000 per year for a $5 million professional liability insurance
sport
Posts: 10731
Joined: Tue Feb 27, 2007 3:26 pm
Location: Cleveland, OH

Re: Insurance for Consulting LLC?

Post by sport »

newkidontheblock wrote: Wed Nov 24, 2021 5:05 pm There is no need to purchase professional liability insurance unless your client requires it.
What if the client sues him/her?
TheMoneyMan
Posts: 11
Joined: Thu Feb 12, 2015 10:11 pm

Re: Insurance for Consulting LLC?

Post by TheMoneyMan »

newkidontheblock wrote: Wed Nov 24, 2021 5:05 pm Your client will have specific insurance requirements. There is no need to purchase professional liability insurance unless your client requires it.

I pay about $6000 per year for a $5 million professional liability insurance
Frankly, this is terrible advice. If you are providing professional services in an engineering capacity, you should have professional liability coverage regardless if it is required by a client or not. OP, where are you located? Feel free to PM me as I have extensive experience in this area.
mchampse
Posts: 289
Joined: Mon Feb 26, 2007 1:45 am

Re: Insurance for Consulting LLC?

Post by mchampse »

I’m in the get insurance as required by your client camp. In the off chance that a client does sue, the LLC gives you protection.
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alexp
Posts: 56
Joined: Wed Jan 01, 2020 1:22 am

Re: Insurance for Consulting LLC?

Post by alexp »

I asked a similar question yesterday and have been doing some research on this topic since last couple of days. Based on the suggestions from this forum as well as my insurance agent, I have decided to get professional liability and general liability coverage.

Our contract also mentions worker comp insurance, but that is not necessary as per the insurance agent and my research - as we don’t have any employees and this insurance doesn’t cover the owners. Same goes with auto liability - we have personal vehicles.
Topic Author
albireo13
Posts: 91
Joined: Wed Jun 24, 2015 6:35 am

Re: Insurance for Consulting LLC?

Post by albireo13 »

Well, the large company client demands I have 1M/2M liability, Workers Comp, and professional auto insurance .... minimum.
All this despite I am a single member-LLC doing remote work for them.

It ends up being another $1000+ out of my pocket.
Of course, this was a last minute requirement put out by Megacorp.


I am thinking of backing out. This reminds me why I retired ... the large company BS!
NYCaviator
Posts: 498
Joined: Sat Apr 09, 2016 5:06 pm
Location: NYC

Re: Insurance for Consulting LLC?

Post by NYCaviator »

mchampse wrote: Wed Nov 24, 2021 10:08 pm I’m in the get insurance as required by your client camp. In the off chance that a client does sue, the LLC gives you protection.
This is not necessarily true. An LLC will not protect you from professional malpractice, and it sounds like OP is an engineer. Maybe OP would be covered under some professional liability policy issued by the company they are contracting with, but I'd want to be very sure before I took that gamble.
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