Check against which risks you need to protect yourself.
There are many types of business insurance, so much so that you may no longer see the wood for the trees. What types of business insurance are there? And which do you need as an entrepreneur?
Entrepreneurship has many beautiful sides. But there are also risks involved. Fortunately, you can insure yourself against these risks thanks to one or more company insurance policies. That way, you can stay focused on doing business even if something goes wrong. An overview of the most important insurance policies for your company.
Business liability insurance (AVB)
Most companies have business liability insurance. With this insurance, you protect your company against damage that your company (for example, you, an employee, or a product) causes to a customer or client. This includes material damage, personal injury, and the financial consequences thereof. For example, you receive a client in your office who slips on a folder lying around and is injured as a result. An AVB covers this damage.
Professional liability insurance (BAV)
Professional liability insurance protects you against financial loss due to professional errors. For example, as an ICT professional, you make a programming error, resulting in software not running for a while, and the company incurs considerable financial damage. This insurance is sometimes confused with the AVB, but the BAV and AVB differ.
Insurers often offer professional liability insurance per occupational group. The occupational risks are different in every industry: for a programmer, for a consultant, for a communication advisor, and so on. Incidentally: it happens more and more often that clients make a BAV mandatory when awarding assignments.
Directors and Officers Liability (D&O)
There are special directors’ and officers’ liability insurance for directors, supervisory directors, and supervisors. Directors are increasingly being held personally liable for wrong decisions on behalf of the company. This can mean a major drain on private wealth. With director’s liability insurance, you are insured against management errors.
Cyber insurance has been on the rise recently because companies are increasingly becoming victims of cybercrime. Cybercrime comes in various forms: viruses, DDoS attacks, ransomware, hacks, and system break-ins. Cyber insurance can indemnify you in such cases. But also when data ends up on the street due to human error. In such a case, the insurance company can help you to repair the damage.
Insurance for your business premises and inventory
A storm, fire, or burglary can cause major damage to your business premises. You can insure yourself against this via building insurance. In addition, you can also insure yourself against damage to items in your building through inventory insurance. You can read more about this type of insurance in the article: Which insurance do I need for my business premises?
Business continuity insurance
In addition to the physical damage to your building, inventory, and goods, business processes can also come to a standstill. This may result in (temporary) loss of income. To get your company operational and accessible as quickly as possible, you sometimes have to incur many costs. Business interruption insurance covers almost all of these costs. The reconstruction costs (costs you incur for restoring administration and building up the customer base) also fall under this.
Unfortunately, being right and being right are sometimes different. If you get into a conflict with a staff member, client, or supplier, the costs for a lawyer can sometimes be high. With legal assistance insurance for your company, you are assured of legal advice. Many legal conflicts have to do with outstanding bills. So always check whether collection assistance is also included in the legal expenses insurance.
Transport and Transportation
You can insure a company car, delivery van or bus, truck, and work equipment such as a forklift truck with insurance for transport. You can also insure the transport of goods with goods insurance.
Every resident of the Netherlands must have health insurance. As an entrepreneur, you are no exception to this. In addition to the premium for the basic package and any additional insurance policies, you also pay a Health Insurance Act contribution. If you are an entrepreneur for income tax purposes, you pay this contribution on the profit from your business.
Disability insurance (AOV)
If an entrepreneur falls ill, he will not be paid. But the costs continue. Disability insurance (AOV) covers the financial risks of disability. This way, you will still receive a wage if you are ill for a long time or can no longer work. Disability insurance is an important insurance for entrepreneurs. Yet only 1 in 5 self-employed persons currently have disability insurance. The Pension Agreement stipulates that an AOV will become compulsory for self-employed persons without employees. This obligation will take effect in 2024 at the earliest.
You may need a whole range of insurance to start safely as an entrepreneur. So keep the following tips in mind:
- Many insurers offer a discount for starting entrepreneurs. So ask an intermediary or insurer what is possible.
- Bundle your insurance policies in one package, and you often get a discount on the premium.
Entrepreneurship involves risks, but by choosing the right insurance with matching conditions, you can still enjoy doing this, even if things are not going well.