Insurance details are mandatory in any independent consultant agreement form. There can be no agreement without these details. In fact, an agreement that lacks this kind of information is not worth the piece of paper on which it is written. Insurance is not a requirement for all types of services every independent consultant provides. For example, some consultants provide writing services. You would struggle finding out the importance of clarifying issues regarding insurance when negotiating an agreement with a client for writing services rendered.
However, insurance is a must for consultancy services requiring traveling to various destinations.
Some of the insurance policies worth taking include:
§ automobile liability
§ comprehensive cover
§ general liability insurance
Apart from these, there may be instances when an independent consultant also needs errors and omissions insurance coverage. The Worker’s Compensation coverage is also mentioned a lot within the consultancy circles. Doing any consultancy work that’s capable of causing injuries requires an insurance coverage. If somebody might be injured or suffer a loss, the consultant is legally required to possess a valid cover. If the work might damage or destroy properties, having a valid insurance cover would be a great idea.
It’s good for independent consultants to have valid professional indemnity insurance and public liability insurance covers. An independent consultant contemplating hiring new workers would also need to have valid Worker’s Compensation cover. At times, a client or one of the workers you hired to work on the project with you might consider suing you. It’s a good idea to check if the independent consultant agreement form mentions the measures to take when such a situation arises. Otherwise, you would need a lawyer.
The language used on the independent consultant agreement form plays a role in determining whether insurance is necessary. The language determines the exact type of insurance policy to buy. Also, by studying the form the consultant and client can examine and understand the obligations they have for each other. Therefore, do not be in a hurry to sign the agreement form. Take time to study it with an experienced lawyer or consultant. Some of the consultant’s duties and responsibilities to clients include:
b) client priority
c) objective assessment
d) plan of action
The independent consultant agreement form must also mention business insurance. This type of insurance is a requirement for any consultant who hires subcontractors. You have the option of asking the subcontractors to buy their own insurance covers. Also, you may opt to cover the subcontractors. To do this, check your existing, valid policy for the section marked ‘additional insured’ or any similar terms. While adding them, do not forget that you will be absorbing or assuming the subcontractors’ liabilities.
Depending on your niche, clients may never consider hiring you until they know that you possess the relevant insurance covers. Some clients even go out of their way to check that the consultant has valid insurance. Expect some of them to ask you for a Certificate of Liability Insurance. Again, the agreement form should mention these details so that you do not turn away in anger at the realization that you lack the insurance covers that the client wants. If the form hasn’t tackled the insurance issue well (or in any way), ask the client for an explanation.
The lesson worth picking from all this is that it’s important to know your contract well. Take time to go through the independent consultant agreement form in great detail. Be as familiar as you possibly can with the form. Ask the client for time to study the contents on the agreement form. Study the form to know what your clients require from you or any independent consultant they hire. If the project requires hiring subcontractors, ask them if they are insured. Do not hesitate to ask the uninsured to buy their own policies.