In these cases, your business would be liable for costs related to the damage caused. Business liability insurance covers these claims.
What is not covered?
Business liability insurance generally does not cover:
- Giving the wrong advice - this is covered by professional indemnity insurance (see below)
- Damage to yourself or your company
- Damage or costs you incur to redeliver a product or service
- Environmental damage
- Legal costs
- Deliberate damage or damage caused by recklessness
- Damage caused by a motor vehicle or aircraft
Professional indemnity insurance (Beroepsaansprakelijkheidsverzekering, BAV)
Also sometimes known as professional liability insurance, professional indemnity insurance (Beroepsaansprakelijksheidsverzekering or BAV) covers damages caused by professional errors made by you or your staff. For instance, if your client suffers a financial loss due to an error you make.
Is professional indemnity insurance mandatory in the Netherlands?
In the Netherlands, professional indemnity insurance is mandatory for certain occupations, including:
For other occupations, it is voluntary, but many professional and business organisations require their members to have professional indemnity insurance.
What’s covered?
Professional indemnity insurance covers you if a client or customer suffers financial losses due to a mistake made by you. For instance, if an architect gets a measurement wrong and causes a delay to a construction project, or an accountant miscalculates something for a client’s tax return, resulting in them being fined by the Belastingdienst.
In cases like these, the customer can hold you personally liable for the damage or financial loss they suffered as a result of your actions. Professional indemnity insurance covers these claims, including:
- Damage caused by professional errors
- Loss of documents
- Legal expenses to fight unjustified claims
- What is not covered by professional indemnity insurance?
Professional indemnity insurance does not cover:
- Damage you, your business or your employees cause to other people or their property (this is covered by business liability insurance)
- Costs you incur to redo your work
- Damage caused intentionally, by recklessness, or by unlawful actions
Business legal insurance
While personal legal expenses insurance relates to personal legal disputes, business legal expenses insurance covers the cost of legal assistance in any disputes related to your business activities, for instance, if you have a conflict with a supplier, customer or employee, such as:
- A customer refuses to pay an invoice
- You dismiss an employee and they contest the contract termination
- You have a disagreement with your landlord over your business premises
Most policies will cover legal advice, mediation and, if necessary, costs related to litigation, court fees and attorney fees.
Legal expenses insurance is not mandatory, but many self-employed people choose to take it out to protect themselves from the potentially high costs related to legal disputes.
Business legal expenses insurance providers
You can take out a business legal expenses insurance policy with:
Cyber insurance
If you use computers and technology every day as part of your business, you might also think about taking out cyber insurance, which covers you for any costs you incur if you become the victim of a cyberattack like a virus, hack or ransomware.
Cyber insurance policies usually cover:
- Preventative measures
- Repair, if you are the victim of a cybercrime
- Compensation, for instance, if you lose income due to a cyberattack
Buildings, goods and inventory insurance
No matter whether you rent an office space, own your business premises, or work from home, you might also want to take out policies to protect your business premises, your business equipment, and stock:
- Buildings insurance covers your business premises in cases like burglaries or fires. You only need it if you own your business premises.
- Inventory insurance or business contents insurance covers damage caused to tools, machinery, computers and electronics caused by fire, water, burglary or vandalism. It is sometimes included in buildings insurance policies.
- Goods insurance covers damage to your stock, including raw materials, semi-finished products, finished products, fuel and packaging.
Univé offers work equipment insurance in the Netherlands.
Business interruption insurance
Should your business activities be disrupted or come to a complete standstill due to a fire, water damage, a storm, vandalism or theft, business interruption insurance steps in to cover your loss of turnover. It might be worth taking out a policy if you are dependent on your business premises or any equipment or machines to keep your business running.
Insurance against loss of income
As a self-employed person in the Netherlands, you should also consider how you would provide for yourself if you became unable to work long-term due to illness or an accident, as you may not be entitled to benefits.
There are several ways you can insure your income in the Netherlands, including:
- Disability insurance
- Collective insurance
- Voluntary insurance with the UWV
- Crowdsurance
- Donation circles
Disability insurance (Arbeidsongeschiktheidsverzekering - AOV)
Disability insurance (Arbeidsongeschiktheidsverzekering - AOV) is intended for entrepreneurs and freelancers who depend on the income they earn from their business. It protects you if you are unable to work temporarily or permanently due to an injury or illness.
You can take out disability insurance with the following companies:
In a nutshell, with AOV, you pay a regular premium to an insurance company, which will pay out an agreed-upon monthly sum if, in future, you become (temporarily or permanently) unable to work.
Currently, disability insurance is not compulsory in the Netherlands, but from January 1, 2027, it will be mandatory for all self-employed people who would not be able to otherwise earn more than the minimum wage if they became ill long-term.
Your AOV premium will depend on a number of factors, including:
- Your job
- Your age
- The “waiting period” or “own-risk period”, during which you cover your own loss of income if you were to fall ill
- The extent of the coverage you choose
Collective insurance
As an alternative to AOV, you may also be able to take out “individual disability insurance on collective terms” through an industry or professional organisation.
Voluntary insurance with the UWV
Another alternative to AOV insurance is voluntary insurance with the UWV (vrijwillige verzekering). This covers you for illness, occupational disabilities and unemployment and means you will receive:
If you wish to take out voluntary insurance through the UWV, you must apply within 13 weeks of becoming self-employed (defined as when your automatic coverage through your employer or benefit ends). You must have been covered for illness or occupational disability for at least one year before becoming self-employed.
The cost of voluntary insurance depends on the premium rates set for that year, which is a percentage of the average daily income you are covered for. You can use the UWV calculator to work out how much your premium is likely to be.
You can apply for voluntary UWV insurance via the website.
Crowdsurance
Crowdsurance is a kind of mutual savings scheme under which a group of entrepreneurs agree to help each other should one of them face financial difficulties due to illness or an accident.
With crowdsurance, you join a dedicated platform, open an account, and deposit a pre-agreed amount into that account each month. When you sign up, you need to decide how much income you’d like to receive if you were unable to work.
If you fall ill, the other members of the crowdsurance platform each deposit a small amount into your account each month to make up the total income you are insured for. These payments are tax-free.
Donation circle
Finally, a donation circle (schenkkring or broodfonds - “bread fund”) is a group of entrepreneurs who form an association to support each other financially should one of them fall ill and become unable to work.
Usually you need to be invited to join a donation circle by another member. You will pay a registration fee, a monthly membership fee, and a deposit into your donation circle account.
As a member, you are entitled to receive financial support for up to two years if you are ill or have an accident and are unable to work.
You can find out more about donation circles on the KvK website.
Life insurance
As an entrepreneur, it is also worth thinking about taking out life insurance to ensure that your dependents are not left in financial difficulty should you pass away. Partners and children of employees in the Netherlands are entitled to a survivors’ pension, but entrepreneurs are not part of this scheme. A life insurance policy can ensure your dependents are well provided for.