What is corporate liability insurance?
Business liability insurance covers damage you cause while working. This includes material damage to other people's belongings or personal injury caused by your work. The insurance applies to you as a self-employed person and, if you have one, to your employees.
An AVB does not cover financial loss due to professional misconduct. That is covered by professional liability insurance. The AVB focuses only on physical damage and injury.
Is corporate liability insurance mandatory?
In most cases, an AVB is not legally required for self-employed workers. Nevertheless, there are exceptions:
- Some clients require an AVB before you can start work.
- In healthcare, it is common that without an AVB, you will not get assignments or be allowed to join an agency or healthcare institution.
- Trade associations or labels may require you to be insured.
Even though insurance is not required by law, the financial risks can be so great that the Inland Revenue and government advise always to take this risk seriously. Indeed, claims can amount to tens of thousands of euros or more.
Who is this insurance important for as a self-employed person?
Business liability insurance is especially important for self-employed workers who physically work at customers' premises or handle tools, materials or installations. Think of professions in construction, maintenance, assembly, engineering and landscaping. But entrepreneurs who provide on-site training or guidance are also at risk if a customer suffers damage during their work. In short: as soon as you work at someone's premises or can damage other people's belongings, an AVB is almost indispensable.
In healthcare
If you work in healthcare as a self-employed person, then business liability insurance is almost always necessary. You often work at clients' homes or in institutions. Small accidents can have major consequences, such as material damage or injury. Many healthcare institutions therefore require you to be insured before you start.
What does business liability insurance cover and what doesn't?
An AVB provides cover for:
- material damage to third-party belongings
- personal injury caused by your work
- damage caused by products or materials you use
Not covered are:
- damage to your own belongings
- damage caused by intent or negligence
- damage covered by professional liability
- contractual agreements that are not fulfilled
The exact coverage may vary from one insurer to another, but the basics remain the same: insurance protects you against costs arising from physical or personal injury damage you cause while working
Difference between professional and business liability insurance
These two insurance policies are often confused with each other, but they cover different risks.
Business liability insurance (AVB)
The AVB covers material damage and personal injury. For example, if you drop something at a customer's premises or if someone is injured as a result of your work.
Professional liability insurance (BAV)
The BAV covers financial losses caused by mistakes in your work. Think wrong advice, incorrect calculations or incorrect reports.
Many business owners need both policies to be fully protected. The AVB focuses on physical damage, the BAV on professional errors that cause financial loss.
Cost of business liability insurance zzp
The cost of business liability insurance depends on several factors, such as your profession, the risk profile of your activities, the amount insured, your annual turnover and any additional coverages you choose. The higher the risk you face in your profession, the higher the premium will usually be. Especially professions with a lot of physical work tend to pay more than entrepreneurs who mainly do office work. In practice, the premium can range from a few tens per month to well over a hundred euros, depending on your situation and the choices you make within the policy.
Compare business liability insurance zzp
When choosing an AVB, it is wise to pay attention to:
- the level of coverage
- the deductible
- the specific policy conditions
- exclusions relevant to your profession
- obligations imposed by the insurer, such as use of general terms and conditions
Check that your CoC activities match what you actually do. If this deviates, it could affect your coverage.
Additional insurance for self-employed workers
In addition to the AVB, it may be wise to have additional insurance take, such as a professional liability insurance, a disability insurance, legal aid or cover for inventory, goods and business interruption. Which insurances are relevant to you depends mainly on your activities and the risks involved.
