Business insurances: 9 misunderstandings

9 misconceptions about business insurance

Which of these statements sounds familiar to you? Read how to minimise your risks.

1. I only need business liability insurance

Business liability insurance covers physical damage. For example, if a customer slips on the wet floor in your store and breaks their leg. Professional indemnity insurance covers damage as a result of incorrect advice. Do you work as an adviser or IT specialist? Then you often need both types of insurance.

2. Insurance is too expensive

The cost of insurance depends on your profession and the risks involved. Greater risk means a higher premium and higher costs. You can lower your premiums through a higher deductible. In some cases you can arrange a discount via a sector organisation or by taking out a combination of several insurances with the same provider.

3. My legal expenses insurance covers the costs of legal problems

A business legal expense insurance pays the costs for legal assistance by a legal adviser or lawyer. But it does not cover the amount of the damage. Business liability insurance covers the costs of damage if you, your employees, or your products are liable for any damage. Avoid legal problems with clear general terms and conditions and a careful quotation process.

4. I am privately insured, so I do not insure my business

Private insurance does not cover business assets and activities. You need to take out business inventory insurance for your laptop, equipment, and other business assets. The same goes for liability: your private insurance against civil liability does not protect you in your business activities. You must take ou business liability insurance for that.

5. I have a BV, so I am not personally liable

A besloten vennootschap (BV, private limited company) is a legal entity. With a legal entity, you are usually not personally liable - but you can be. For example, if you are going to apply for a business loan. Then you often have to co-sign as a private individual. Or if you have mismanaged the BV. You can insure against the risk of personal liability after a mistake by taking out director's liability insurance.

6. I can exclude all risks with good terms and conditions

You limit risks with good general terms and conditions, but you cannot prevent every damage or conflict. You cannot exclude all risks. Insurance supplements your general terms and conditions. Do you use your own terms and conditions? Always have them checked by a lawyer.

7. I work alone at home, so I am not at risk

Even if you work from home, you run the risk of a traffic accident or a sports injury. If you are temporarily or permanently unable to work for your business, disability insurance (AOV) provides an income.

8. Mandatory employee insurance covers risks for my staff

Your employees are protected by mandatory employee insurance if they become unemployed, incapacitated for work, or ill. As an employer, you can take out additional insurance for risks and costs in the event of absenteeism, an accident, or the death of an employee. For example, by taking out absenteeism insurance, collective accident insurance, or survivor's insurance.  This offers extra protection for your business and your employees.

9. I built up a pension as an employee, I do not need to as a self-employed professional

That depends on how much pension you built up as an employee. As a business owner, you have to build up your own pension. So, the longer you work as a self-employed professional, the more important it is to check if your pension is sufficient. Do you have a financial buffer and a partner with a good pension? Then there is less need to build up a pension.