Liability insurance for Professional Services

• Do independent contractors need liability insurance?

  Usually, yes. No statute says "1099 workers must buy liability insurance," but three forces converge on it: your client's policy doesn't defend you, the contracts that get you hired demand proof of your own general liability, and states with contractor registration laws make coverage a condition of taking the work at all.

• Are IT consulting businesses required to carry insurance?

  Not by any statute aimed at IT consulting. The legal mandates that exist are generic — workers' compensation and related coverage once you have employees, commercial auto for business vehicles. Everything else is required by contract: client MSAs and vendor-onboarding rules that demand E&O, cyber, and general liability before you start billable work.

• Do consultants need E&O insurance?

  Usually yes — not by law, but because the two forces that matter point the same way: client contracts increasingly require E&O before you can sign, and general liability explicitly won't cover what consultants actually get sued over — advice and work product that costs a client money. If your recommendations drive client decisions, E&O is the policy that responds.

• Do I need E&O insurance as a notary?

  Not to get commissioned — states mandate a surety bond, not E&O insurance. But the bond protects the public from your mistakes, and if it pays a claim you are required to pay the surety back. E&O is the optional policy that actually protects the notary. Bonded and insured are not the same thing.

• What type of business insurance do I need for my consulting business?

  Professional liability (E&O) is the anchor — it answers the claims consulting actually generates. General liability gets added early because client offices and vendor-onboarding portals demand it, cyber joins once client data touches your systems, and workers' comp becomes statutory with your first hire. Let your client contracts, not a product menu, set the list.

Coverage mechanics for Professional Services

Policy mechanics, exclusions, certificates, and claims questions live on our sister publication: Professional Services on isthiscovered.org.