What is professional indemnity insurance zzp
Professional liability insurance covers financial losses caused by professional error. These are errors in advice, calculations, analyses or professional actions that result in financial loss to a client. Think of wrong advice that causes loss of turnover or an error in a report on which a client bases important decisions.
As a business owner, you yourself are liable for such mistakes. Insurance takes that risk from you and pays claims and legal fees.
Why professional indemnity insurance is important
For self-employed people, professional liability insurance is essential because you work without a safety net. One mistake can lead to a claim you cannot pay yourself. In addition, many clients nowadays impose an insurance obligation. Especially in consultancy work, project management and specialist services, it is almost impossible to get assignments without insurance.
The insurance also ensures that you get legal support in case of a claim. You are then not alone and that gives peace of mind in your daily work.
Is professional indemnity insurance mandatory
For most self-employed people, there is no legal requirement for professional liability insurance. However, for certain professions, such as lawyers, notaries, accountants, financial advisers and some medical professionals, an obligation arises from professional rules. In other sectors, there is often a duty of practice because clients require insurance. Professional bodies may also allow participation only if you are insured. As a result, insurance often becomes necessary in practice to get assignments as well as to protect yourself.
What is and is not insured
Professional liability insurance cover varies from one insurer to another, but the basics are usually similar. It is mainly about financial damage caused by your professional misconduct, while damage to people or property is covered by a different insurance. Below you will find at a glance what is and what is not usually insured, so you know exactly what you can count on.
| Well insured | Not insured |
| Financial losses due to professional misconduct | Damage to persons or property |
| Loss of documents or data under your responsibility | Cost of redoing work |
| Legal costs for disputed or unjustified claims | Damage caused by intent or fraud |
| Damage due to mistakes or wrong advice | Claims or errors that already existed before the policy was taken out |
Difference between professional and business liability insurance
The two insurances are often mixed up, but they cover completely different risks.
- Professional liability insurance (BAV):
Covers financial losses caused by mistakes in your work. Think wrong advice, wrong calculations or wrong reports. - Business liability insurance (AVB):
A AVB is for damage to property or people you cause during your work. Think of damaging a customer's property or someone suffering injury as a result of your work. The cover is especially relevant if you do physical work, go on location or work with materials.
Zzp professional liability insurance in healthcare
If you work in healthcare as a self-employed person, then professional liability insurance is extra important. In this sector, mistakes can have major consequences for patients' health. Claims for damages can therefore be high.
Several healthcare professions even have a statutory insurance requirement. Doctors, for instance, are obliged to be insured. For other healthcare professionals, such as nurses or physiotherapists, it is not a law, but clients almost always require insurance before you can carry out assignments.
In addition, as a healthcare professional, you are at greater risk of claims than in other sectors. A misjudgement or miscommunication can be enough for liability. Good insurance prevents such claims from jeopardising your business or private assets.
Compare professional liability insurance
It pays to compare different insurers. In doing so, note:
- Coverage: what type of damage is covered by the policy
- Sum insured: how much the insurer pays out at most
- Own risk: what you pay yourself per claim
- Conditions: sometimes it is mandatory to use general terms and conditions or clearly register your activities with the Chamber of Commerce
Make sure you always register correct business activities. If you do work that does not appear in your CoC registration, the insurer may refuse to pay out.
If you have doubts about the right choice, you can seek advice from an independent adviser. This costs money, but will help you make the right decision.
What does professional indemnity insurance for zzp cost?
The cost depends on:
- Your profession or industry
- Your annual turnover
- Whether you have staff
- The chosen insured amount
- The deductible
For many self-employed people, monthly premiums range from several tens to several hundreds of euros. Especially in high-risk sectors, such as finance or healthcare, premiums are higher.
The premium is tax-deductible as a business expense. This means that part is indirectly recouped through tax. When determining your hourly rate, always take insurance costs into account. This way, you avoid having to pay these costs from your private budget.
Professional indemnity insurance is ultimately an investment in the continuity of your business. One claim can be financially devastating and with insurance, you prevent your business from shutting down due to professional misconduct.
