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For an SME limited liability company, business insurance is indispensable — but which do you really need? Three categories: liability (general liability, directors' D&O, professional), business and assets (cyber, fire, business interruption), and personnel (absenteeism, WIA, WGA, accidents). Premiums range from €25 (legal assistance) to €1,500+ per month (comprehensive package for large employers). Below: an overview by category, with Tessa's electronics wholesale business (12 employees) as the common thread — what she does and does not take out.
The short answer
- Liability: General Liability (€30-€300/month), D&O (€500-€5,000/year), professional (€50-€500/month).
- Business: cyber (€50-€500/month), fire, business interruption, contents.
- Personnel: absenteeism (2-7% of payroll), WIA/WGA, collective accidents.
- Mobility: delivery van, business trip.
- Advice: insurance advisor or scan for the optimal package.
Category 1: liability
Business Liability Insurance
Covers damage to third parties caused by employees, products, or business operations. Standard for every entrepreneur with a physical presence or products. See business liability insurance.
Directors' and Officers' Liability (D&O)
Protects directors personally against liability for improper management, errors, or negligence. Not mandatory but strongly recommended — otherwise, directors may be held liable with their private assets. See D&O.
Professional liability
For service providers (lawyers, accountants, IT consultants, architects): covers damage caused by incorrect advice. Industry-specific, often required by professional organizations.
Category 2: business and business assets
Cyber insurance
Covers data breaches, ransomware, business interruption, and liability for online incidents. Increasingly important for all SMEs. See cyber insurance.
Fire and contents insurance
Commercial property, inventory, stock. Standard, often via the building insurer (with the property owner).
Business interruption
Covers lost profits and ongoing costs in the event of prolonged downtime (fire, damage, other incident). Indispensable for manufacturing companies.
Legal expenses insurance
For legal disputes: debt collection, employment law, contracts. Low premium, extensive coverage. See legal assistance insurance.
Category 3: personnel
Absenteeism insurance
Covers continued payment of wages during employee illness. Against the employer's risk of 2 years of continued wage payment (104 weeks). See absenteeism insurance.
WIA and WGA supplement
For long-term disability (after 2 years of absence). UWV benefit often insufficient — supplementary insurance provides up to 70% of last salary. See WIA and WGA.
Group accident insurance
Benefit for permanent injury or death due to an accident. Work and leisure covered. Inexpensive, but sensible. See group accident insurance.
Category 4: mobility
- Delivery van / truck: Third-party liability mandatory, comprehensive/all-risk optional. See delivery van insurance.
- Business travel: for employees on trips abroad — medical, repatriation, baggage. See business travel insurance.
Tessa's insurance package
Tessa has an electronics wholesale business with 12 employees, a warehouse, and an office:
- General Terms and Conditions: €150/month (turnover €3 million).
- D&O for 2 directors: €2,500/year.
- Legal assistance: €95/month.
- Cyber insurance: €250/month (wholesaler with online platform).
- Fire/contents/business interruption: € 350/month (warehouse + stock).
- Absenteeism insurance: 3.5% of payroll of €600,000 = €1,750/month.
- WIA supplement: 1% of total payroll = € 500/month.
- Collective accident insurance: €180/month (€15 per employee).
- Delivery van insurance 2 vehicles: € 250/month.
Total: ~€3,800/month = €45,600/year. Small percentage of turnover, significantly reduces risk.
What NOT to insure?
- Insurance policies that the entrepreneur already has through private means (business travel often via private travel insurance for the director/major shareholder).
- Insurance for low-impact, high-frequency risks (higher deductible).
- Double coverage (General Liability vs. Professional Liability — often overlap).
Honest recommendation
Always start with liability (General Liability + Disability and Obligation) and legal assistance — basic protection. For employees: absenteeism insurance and WIA/WGA supplement. For online activity: cyber insurance is becoming increasingly essential. Conduct a periodic insurance scan (€250-€1,500) — prevents over- and underinsurance. Invest in an independent advisor — not the same company selling and advising.
Frequently Asked Questions
General Liability Insurance (AVB), Directors' D&O at a BV, legal assistance, and for staff: absenteeism insurance. For online activity: cyber insurance. Fire/contents insurance if you have premises or inventory.
Small SME without employees: €200-€500/month. Medium-sized SME (10 employees): €2,000-€5,000/month. Largest items: absenteeism (% of payroll) and cyber (depending on revenue and data).
Annually upon policy renewal. Plus in the event of changes to the company (staff growth, new premises, new activity, international expansion). Insurance scan every 2-3 years for a complete overview.
An independent advisor can compare policies from multiple companies — usually better for the client. A tied advisor (affiliated with a single company) offers more limited advice, but is sometimes cheaper.
Higher deductible = lower premium. For low-frequency risks (cyber incident, major fire): a high deductible is fine. For high-frequency risks (small claims): a low deductible to be able to claim more often.
Overinsurance: double coverage or excessive coverage. Underinsurance: missing coverage or limits that are too low. Both cost money: overinsurance = unnecessary premium, underinsurance = uninsured risk in the event of damage.
Statutory requirement: Third-party liability for company cars, and for personnel, certain employee insurance schemes via payroll tax. Industry requirement (via professional organizations): professional liability for lawyers, accountants, and architects.
