Consulting is a highly rewarding profession, but it also comes with its own set of risks. Depending on the type of practice, the risks may vary, but there are some common issues that all consultants should be aware of. These include failure to meet deadlines, misrepresentation, cost overruns, failure to meet expectations, and the use of subpar contractors. Additionally, employee lawsuits against employers with fewer than 50 employees have seen a sharp rise in the past year. Your consulting business is exposed to both tangible and intangible asset losses.
Tangible property losses refer to things like a fire in your office or the damage or theft of your computers. Intangible asset losses include the theft of your intellectual property or processes. To reduce the risk of losing tangible assets, you can take certain precautions depending on your particular situation. For instance, installing sprinklers will significantly reduce the risk of loss in the event of a fire, and installing an alarm will help deter thieves. TruShield Insurance provides a comprehensive guide to reducing risks in the IPO process.
This guide includes more than 90 pages and 9 different case studies with advice from risk management experts, financial directors, lawyers, investment bankers, and consulting firms that have already gone public. By understanding these common risks faced by small professional services business owners and learning how to mitigate them, you can plan ahead and find the coverage that's right for you. This will facilitate negotiations and reduce the risk that someone is interested in using your work without thoroughly analyzing the financial dimensions of the agreement. This article will provide an overview of the main risks your Connecticut consulting firm faces and some strategies to mitigate them. Insurance is a fundamental component of your consulting firm's risk management strategy, given the average cost of a lawsuit.
Whether your company consists of a few chosen professionals or several thousand, all consulting firms face unique risks. With proper planning and execution, however, you can significantly reduce the risk of losses for your company.