Insurance policies for entrepreneurs

There are mandatory and voluntary insurance policies for entrepreneurs.

TEK’s professional liability and legal expenses insurance

TEK members have professional liability and legal expenses insurance coverage, which not only covers salary earners, but also, with certain restrictions, self-employed persons without any employees. Such activities can also be practised in the form of a business when the member is the sole owner of the business.

Professional liability insurance provides coverage for a third-person personal injury or material or property damage if the insured is liable for the injury or damage under the law in force at the time. You should also have personal accident insurance to cover yourself against any incidents.

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Self-employed persons’ pension insurance, or YEL insurance

  • According to the Self-employed Persons’ Pensions Act, for instance the shareholder of a limited company who works in a managing position in the company and holds alone more than 30 percent or, together with family members, more than 50 per cent of the company or the voting rights, is considered an entrepreneur. If these criteria are met and the income from work is at least as high as the lower limit for YEL, the person must take out YEL insurance.
  • YEL insurance is based on the estimated annual income from work, the lower limit of which is EUR 8 261.71 and the upper limit EUR 183 625 in 2021.
  • You should not underestimate your income from work to minimize your payments, because this will also directly affect the amount of pension you accumulate. In addition, the YEL income is the basis for an entrepreneur's entire social security, such as their unemployment benefit and daily sickness allowance.
  • YEL is the only mandatory insurance for entrepreneurs.

Voluntary insurance policies

Voluntary insurance policies include, for example:

  • legal expenses and business interruption insurance
  • insurance policies to protect property and the entrepreneur personally (such as unemployment security and accident insurance)

In addition, it may be a good idea to consider, for instance, your liability for damage caused to a third party, the potential safety risks of products, and the risk of fire, burglary or a leak.

Business operations can also be unexpectedly interrupted due to a sudden, unforeseeable incident. You can prepare for such incidents and the resulting loss of income with a business interruption insurance.

You should shop around to find the best insurance company for you, because there can be major differences between the scope and premiums of different insurance policies.

What you need to know when setting up a business

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