INSURANCE RELATED TO SETTING UP A BUSINESS

When setting up a business, SMEs (small and medium-sized enterprises) must also take out various insurance policies.

There are two types of insurance in the foreground: social insurance for the entrepreneur himself and for any collaborators, as well as company insurance.

Which insurances can be freely chosen and which are compulsory in the case of social insurances depends on the legal form chosen.

Basically it applies:

• Owners of sole proprietorships, general partnerships and limited partnerships qualify as independent workers for social insurance. To a large extent, they have to provide for their own pension.

• The owners of anonymous companies or limited liability companies are entrepreneurs and collaborators at the same time. For social insurance they therefore count as employees. In this case, most of the insurances are mandatory.

Corporate insurance

When it comes to corporate insurance, businesses have more freedom than social insurance. Basically they are free to choose which risks they want to cover and which they don’t.

Civil liability for companies

A corporate liability insurance is part of the basic requirement of any business. Risks vary greatly from sector to sector. Therefore, before taking out insurance it is advisable to carry out a precise risk analysis relating to the company to be insured.

The following risks can be covered:

Risks associated with installations: damage generated by civil liability as an owner or tenant of commercial properties. Example: a tile detaches from the building and falls on a parked car, damaging it.

Risks associated with the exercise: damage generated by business processes. Example: when replacing the washing machine, a worker damages a kitchen cabinet which must be replaced later.

Risks related to products: damage generated by errors in the manufacture or development of products. Example: A piece of a coffee machine in your product line overheats and can catch fire.

In addition to these, several extraordinary risks can also be included. Damages caused to the entrepreneur himself or to his family are not covered by civil liability for companies.

Anyone practicing a freelance profession, such as a doctor, pharmacist or architect, can take out voluntary civil liability insurance. The latter covers the specific risks associated with the exercise of the relevant profession.

Property insurance

In property insurance, a distinction is made between building insurance and movable property insurance (goods, machinery, tools, computers, motor vehicles, etc.).

It is worthwhile for entrepreneurs to take out building insurance only if the business is carried out in their own property. Everything in the building is considered real estate. Fundamentally, property insurance covers elementary damage, fire, burglary and to some extent glass breakage. The coverage required can vary greatly by industry.

Business interruption insurance

It covers the financial consequences following a business interruption (direct expenses as well as lost profits). The business interruption insurance can be taken out for practically all risks and is particularly suitable for companies that have no possibility of diversion into production.

Tip: You should also take out legal protection insurance. It covers expenses that arise from judicial proceedings or from defense against unjustified claims.

Insurance of machinery and electronic systems

Machinery insurance (or general insurance for technical installations) covers damage to machinery, equipment, tools and other technical installations caused by the entrepreneur himself or by third parties. Insurance solutions also exist for computer systems.

Insurance against health risks

Often underestimated, health issues are crucial for the company. In order to avoid bankruptcy and continue his business in the event of trouble, the entrepreneur must be insured against illness, accident, disability and death. The risk of being unable to work due to illness can be covered by a daily indemnity insurance (maximum two years of indemnity). Business stoppage due to an accident is covered by accident insurance.

In the event of disability, the matter can become more complicated. It is possible to increase the benefits covered by the company’s pension fund or to insure yourself, for example, through private insurance. The same happens with regard to death: an entrepreneur with a dependent family will have to insure better than a young single entrepreneur.

Swiss Export Risk Insurance (SERV)

SERV insurances cover the risks associated with exporting merchandise, as well as commercial (e.g. customer insolvency) and political risks (e.g. extraordinary state measures, civil unrest, boycotts, blocking of fund transfers) in the country of destination.

Supplier credit insurance is one of SERV’s main products: it covers credit risks arising from export transactions. Manufacturing risk insurance, which is also in great demand, protects the exporter against the risk of production interruption. SERV also offers solutions that enhance the liquidity level of exporting SMEs, such as manufacturing credit insurance and the guarantee on “Bonds”.