How much does insurance cost for a consulting business?

Where a consulting firm’s premium goes

A consultant sells advice, analysis and project work, so the losses insurers price for are a client’s financial losses, not injuries or damaged property. That shifts the budget toward professional liability (also called errors and omissions, or E&O). Insureon’s own description of the two policies shows the split. General liability covers a client who trips in your office or a laptop a consultant damages. E&O covers the lawsuit when “a research consultant makes a recommendation that leads to financial losses for a client”⁠¹⁸.

Insureon is the only publisher in our data that breaks out a full set of consultant premiums. These are medians of policies its consulting customers bought, from more than 25,000 small firms. Most have fewer than five employees, revenue of about $50,000 to over $200,000, and five years or less in business⁠¹⁸:

Scroll the table sideways to see every column.

Insureon labels these figures “average” in its headings but says they are medians⁠¹⁸. Seventy-one percent of its consulting buyers chose E&O limits of $1 million per claim and $1 million aggregate, and 83% chose general liability at $1 million / $2 million⁠¹⁸. Those limits match the contract clauses further down this page. Insureon says higher limits raise the premium⁠¹⁸.

E&O and general liability: three insurers, three methods

The other insurers in our data publish consultant figures for some coverages only. They measure them differently:

Insurer- and broker-reported figures from each company’s own customers, as published on its website; not a random sample of all businesses. Figures are rounded as published.

Reading them side by side:

• E&O. ERGO NEXT’s business-consultant average of $60 a month is close to Insureon’s $62 median, but its data is older (August 2025)⁠¹⁸⁠¹⁹. Its IT consultants average $90 a month, 50% more than business consultants (our calculation). That gap reflects the extra exposure when advice touches systems a client runs on. Washington’s comp manual draws the same line by placing computer consulting in its own class, 5302⁠⁶. The Hartford publishes no consultant E&O figure. Its standalone miscellaneous professional liability policy shows an average minimum monthly premium of $62, while the same page says small businesses “typically pay about $76 a month” (page last updated April 11, 2025)⁠²⁴.
• General liability. Insureon’s $32 median and ERGO NEXT’s $35 average are near each other⁠¹⁸⁠²⁰. ERGO NEXT’s page text says business consultants pay “about $50”, which conflicts with its own table⁠²⁰. The Hartford’s $720 a year for business consulting works out to $60 a month (our calculation)⁠²². An average is pulled up by a few large policies and a median is not. Insureon’s consulting customers mostly have fewer than five employees⁠¹⁸; the Hartford does not describe the customers behind its table.
• Business owner’s policy. The Hartford’s $86 monthly average for business consulting is above Insureon’s $61 median⁠¹⁸⁠²³. A BOP adds property cover for the office and equipment to the liability policy, so it costs more where there is more to insure.

What moves the E&O price, according to Insureon’s consulting page: the specialty (it names IT consulting as higher-risk), revenue, number of employees, claims history and the limits and deductible chosen⁠¹⁸. The Hartford lists limits from $250,000 to $2 million on its professional liability policies, and says higher limits raise the price⁠²⁴.

What client contracts require

Most consultants buy E&O because a client asks for a certificate before signing. The requirement usually comes from the contract, not from a statute. Public-sector contracts publish their terms, so they show what a demanding client asks for.

Federal contracts (FAR and GSA)

The Federal Acquisition Regulation’s insurance minimums cover physical risks only⁠¹¹:

• Workers’ comp and employer’s liability. Comply with state comp law, plus employer’s liability of at least $100,000. The employer’s liability rule does not apply in states with monopolistic funds (Ohio, Washington and Wyoming are such states).
• General liability. Bodily injury coverage of at least $500,000 per occurrence. Property damage coverage is required “only in special circumstances”.
• Auto. $200,000 per person and $500,000 per occurrence for bodily injury, plus $20,000 for property damage, for vehicles used on the contract.

There is no professional liability or cyber minimum in FAR 28.307-2⁠¹¹. Even these minimums apply only through clause 52.228-5. That clause goes into fixed-price contracts above the simplified acquisition threshold, which is $350,000, when the work is done on a government installation⁠¹²⁠¹⁴. The contracting officer can leave it out if the contractor only makes “a few brief visits per month”⁠¹². A consultant who works from their own office and attends a monthly review on site may therefore face no FAR insurance clause. Before starting work under the clause, you must notify the contracting officer in writing that the insurance is in place. Each policy must also carry an endorsement giving the government notice before cancellation or a material change takes effect⁠¹³. In GSA contracts above the same threshold with on-site work, each policy except workers’ comp must also name the United States as an additional insured, and the insurer must waive subrogation⁠¹⁵⁠²⁷. Agencies can still write a professional liability requirement into the schedule of a particular contract⁠¹³. Read each solicitation.

State agencies

State contracts usually set higher limits than the federal minimums and add professional and cyber cover:

The California document is a set of samples. DGS says actual requirements depend on the scope of work, and that a statement on a certificate “is not acceptable in lieu of the actual endorsement”⁠¹⁶. The Michigan contract is one award for cybersecurity assessment services, effective January 25, 2021 with an initial expiry of January 24, 2026. Other Michigan contracts can set other terms. Three of its conditions affect what a consultant pays⁠¹⁷:

1. Retroactive date

   If any required policy is claims-made, as E&O and cyber policies typically are, its retroactive date must fall before the contract starts. A firm that switches insurers and loses its prior-acts cover fails this test.

2. Three years after completion

   Coverage must stay in force, with proof, for at least three years after the work ends. If a policy lapses, you must buy an extended reporting period instead. You keep paying for E&O after the engagement’s fees stop.

3. Insurer rating

   Coverage must come from an insurer rated A- or better by A.M. Best.

Cyber: priced on the data you hold

Cyber cover is usually a separate policy. Insureon’s consulting customers paid a median of $81 a month, below the $129 median across all its small-business cyber buyers⁠¹⁸⁠²⁶. Insureon says the price depends mainly on how much sensitive data a firm handles⁠¹⁸. A consultant who holds client payroll files or patient records sits higher than one who works only from public data. The Michigan contract above shows what a public client can require: $1 million, with regulatory defense and penalties included⁠¹⁷. CIAB members reported cyber renewal premiums falling 3.2% on average in the second quarter of 2026. That figure covers all account sizes, not just consultants⁠²⁵.

Workers’ comp for office-based and travelling consultants

Comp is a small line for an advisory firm, but the class matters, because it decides whether time at client sites is rated as office work. Ohio, Washington and Wyoming run state funds that publish the rate itself:

Base rates set by the state fund before experience modification. Ohio and Wyoming charge per $100 of payroll; Washington charges per hour worked, and part is withheld from wages. Other states’ insurers file their own rates; see where rates are published.

• Ohio has no consulting class. Its rules allow code 8810 only for work at a workstation separated from operating hazards. An employee whose duties include “outside sales or outside representation” is disqualified from it⁠². Code 8871 covers clerical work done from the employee’s home⁠². Code 8742 applies to work done away from the employer’s premises, and costs $0.0996 per $100, 2.1 times the 8810 rate (our calculation)⁠¹⁠². Code 8803 covers travelling auditors, accountants and computer system designers or programmers⁠¹. Which code applies to a consultant who spends most days at client sites is BWC’s decision. Ask for it in writing.
• Washington has a management consulting class: 5301-12, “Management consultant services, N.O.C.” It covers firms that analyze organizations, systems or workflows and report back. It includes their clerical staff, outside sales staff and anyone travelling between offices. Advertising agencies, PR firms and financial advisers who do not buy on clients’ behalf also fall in it. Computer consulting goes to 5302⁠⁵⁠⁶. Clerical class 4904 allows only “limited and minimal” work outside the office, such as attending meetings⁠⁷. Of the $0.2427 hourly rate for 5301, $0.1912 is the supplemental pension assessment. That share, 79%, is the same flat $0.1912 in nearly every class, so office rates in Washington vary less than the underlying risk does (our calculation)⁠⁴.
• Wyoming makes coverage compulsory only for the industries listed in W.S. 27-14-108. The list skips NAICS sector 54, professional, scientific and technical services⁠⁹. A consulting firm can elect coverage but must then cover all employees, and it can withdraw only after two years of coverage, if current on its payments⁠⁹. Its 2026 schedule has no consulting line. DWS assigns the class after registration⁠⁸. The clerical class 000010 ($0.31) and 541990, other professional services ($0.40), are the closest lines.

From rate to premium: worked examples

Our calculations at 2026 base rates, before any experience modification; not quotes.

1. Ohio, three consultants, $360,000 payroll

   All in 8810: 3,600 × $0.0466 = $167.76 a year. If BWC put all three in 8742 instead: 3,600 × $0.0996 = $358.56⁠¹. For a sole employee earning $90,000 in 8810, the arithmetic gives $41.94, so the $120 minimum annual administrative charge applies⁠³. Any 8810 payroll below about $257,500 ends up at the minimum.

2. Washington, three consultants working 2,000 hours each in 5301

   6,000 × $0.2427 = $1,456.20. Of that, $0.10455 an hour ($627.30) may be withheld from wages, leaving the employer $828.90⁠⁴.

3. Wyoming, same $360,000 payroll, if the firm elects coverage

   $1,440 a year at 541990, or $1,116 at 000010⁠⁸.

The Wyoming result is several times the Ohio result for the same payroll, because Wyoming’s clerical rate is 6.7 times Ohio’s (our calculation). Either way, comp is a fraction of the E&O figures above. The BLS measured employers in professional and business services spending $0.36 per hour worked on comp in June 2026, 0.6% of total compensation. That is 84% of the private-industry average of $0.43⁠¹⁰. Its occupation series puts management and professional jobs at $0.30 an hour. The same survey puts health insurance in the sector at $4.11 an hour, more than eleven times the comp cost⁠¹⁰.

Average employer cost per employee hour worked for workers' compensation and for health insurance, averaged across all workers in the group, plus workers' compensation as a percent of total compensation. Group averages mix high- and low-risk jobs, so they are not a premium rate for any single business. U.S. Bureau of Labor Statistics (BLS), National Compensation Survey, June 2026 (2026 Q2), private industry workers, released 9 Sep 2026.

ERGO NEXT reports a $60 monthly comp average for its consultant customers. Its disclosure on that page refers to commercial property buyers, apparently a copy error⁠²¹. Insureon’s consulting median is $44⁠¹⁸. In a monopolistic state neither figure applies, because the state fund is the only seller.

Building a consulting firm’s insurance budget

No published figure gives a consulting firm’s total insurance cost. Build it from the pieces that set each price:

1. Start from the contracts you hold or are bidding

   Write down each client’s required coverages, limits, additional-insured and waiver wording, and any claims-made tail period. The highest requirement becomes your floor. The California and Michigan terms above, $1 million to $2 million per line, show what a public client can require⁠¹⁶⁠¹⁷.

2. Price E&O on revenue, specialty and limits

   Give each insurer the same description of your services and your revenue, and quote the same limit and deductible. Compare against the $60 to $62 a month that two insurers report for $1 million policies. Expect more for IT work or higher limits⁠¹⁸⁠¹⁹.

3. Keep the retroactive date when you renew or switch

   A new policy that resets it leaves past engagements uncovered. That would fail a contract like Michigan’s⁠¹⁷.

4. Choose GL or a BOP depending on whether you have an office

   A home-based firm with only client-site work may need little property cover. A leased office often brings a lease clause and equipment worth insuring.

5. Get the comp class right

   In Ohio, Washington and Wyoming, use the official rates above. Elsewhere, ask the insurer which class it used for staff who work at client sites. Ohio’s outside-sales class 8742 costs 2.1 times its clerical rate⁠¹.

6. Price cyber on your data

   Count the client records you store and say whether they include health, payment or Social Security data. Insureon names data volume as the main price driver⁠¹⁸.

The professional liability guide explains claims-made policies and tail cover. The cyber guide covers what breach policies pay for. The class code guide explains how a comp class is assigned and challenged.

Sources

1. 1
   Ohio Bureau of Workers' Compensation / Ohio Administrative Code, OAC 4123-17-06, Appendix A: base rates effective July 1, 2026 (private employers) Checked 13 Oct 2026 · Back to text ↑
2. 2
   Ohio Bureau of Workers' Compensation / Ohio Administrative Code, OAC 4123-17-08, Classifications according to National Council on Compensation Insurance (effective July 1, 2026) Checked 13 Oct 2026 · Back to text ↑
3. 3
   Ohio Bureau of Workers' Compensation / Ohio Administrative Code, OAC 4123-17-26, Minimum annual administrative charge Checked 13 Oct 2026 · Back to text ↑
4. 4
   Washington State Department of Labor & Industries, 2026 hourly rates by risk classification Checked 13 Oct 2026 · Back to text ↑
5. 5
   Washington State Legislature, WAC 296-17A-5301, Classification 5301 Checked 13 Oct 2026 · Back to text ↑
6. 6
   Washington State Legislature, WAC 296-17A-5302, Classification 5302 Checked 13 Oct 2026 · Back to text ↑
7. 7
   Washington State Legislature, WAC 296-17A-4904, Classification 4904 Checked 13 Oct 2026 · Back to text ↑
8. 8
   Wyoming Department of Workforce Services, Workers' compensation for employers; 2026 industry base rates by classification Checked 13 Oct 2026 · Back to text ↑
9. 9
   Wyoming Legislature, Wyoming Statutes title 27, W.S. 27-14-108 (extrahazardous employment; optional coverage) Checked 13 Oct 2026 · Back to text ↑
10. 10
    U.S. Bureau of Labor Statistics, Employer Costs for Employee Compensation, June 2026 (released Sept. 9, 2026) Checked 13 Oct 2026 · Back to text ↑
11. 11
    Acquisition.gov (General Services Administration), FAR 28.307-2, Liability (FAC 2026-01) Checked 13 Oct 2026 · Back to text ↑
12. 12
    Acquisition.gov (General Services Administration), FAR 28.310, Contract clause for work on a Government installation Checked 13 Oct 2026 · Back to text ↑
13. 13
    Acquisition.gov (General Services Administration), FAR 52.228-5, Insurance – Work on a Government Installation Checked 13 Oct 2026 · Back to text ↑
14. 14
    Acquisition.gov (General Services Administration), FAR 2.101, Definitions (simplified acquisition threshold) Checked 13 Oct 2026 · Back to text ↑
15. 15
    Acquisition.gov (General Services Administration), GSAM 552.228-5, Government as Additional Insured Checked 13 Oct 2026 · Back to text ↑
16. 16
    California Department of General Services, Contract insurance requirements: when doing business with California state government Checked 13 Oct 2026 · Back to text ↑
17. 17
    State of Michigan, Department of Technology, Management and Budget, Contract No. 210000000303, Independent Cyber Assessment Services for Local Entities (standard contract terms) Checked 13 Oct 2026 · Back to text ↑
18. 18
    Insureon, Consulting business insurance cost (updated June 30, 2026) Checked 13 Oct 2026 · Back to text ↑
19. 19
    ERGO NEXT, How much does professional liability insurance cost? (data updated August 2025) Checked 13 Oct 2026 · Back to text ↑
20. 20
    ERGO NEXT, How much does general liability insurance cost? (data updated April 2026) Checked 13 Oct 2026 · Back to text ↑
21. 21
    ERGO NEXT, How much does workers' comp insurance cost? (data updated April 2026) Checked 13 Oct 2026 · Back to text ↑
22. 22
    The Hartford, How much does general liability insurance cost? Checked 13 Oct 2026 · Back to text ↑
23. 23
    The Hartford, Business owner's policy cost Checked 13 Oct 2026 · Back to text ↑
24. 24
    The Hartford, How much does professional liability insurance cost? (last updated April 11, 2025) Checked 13 Oct 2026 · Back to text ↑
25. 25
    The Council of Insurance Agents & Brokers (CIAB), Commercial Property/Casualty Market Index, Q2 2026 Checked 13 Oct 2026 · Back to text ↑
26. 26
    Insureon, How much does cyber insurance cost? Checked 13 Oct 2026 · Back to text ↑
27. 27
    Acquisition.gov (General Services Administration), GSAM 528.310, Contract clause for work on a Government installation Checked 13 Oct 2026 · Back to text ↑

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