Insurance: Social security schemes and business insurance

During the business start-up phase, SMEs also have to register for various types of insurance.

Insurance can be broken down into two different types: social security for the entrepreneur and any employees, and company insurance.

Depending on the legal structure chosen, some social security schemes are mandatory for the entrepreneur; others are optional.

In principle, it is considered that:

  • Owners of private companies, general partnerships or limited partnerships are self-employed from the point of view of social security schemes. They are largely responsible for their own pension schemes.
  • Owners of limited companies or limited liability companies are entrepreneurs and, at the same time, their own employees. For social security schemes, they are therefore regarded as dependent workers. In this case, most types of insurance are mandatory. 

Company insurance

Entrepreneurs have more freedom for company insurance than for social security schemes. In principle, they can decide themselves which risks to cover.

Company civil liability

Essentially, all companies need civil liability insurance. The risks vary from one sector to another. Companies are therefore advised to specifically assess and analyze their risks before taking out an insurance policy.

The following risks may be covered:

Risks associated with premises: damage occurring under the responsibility of the owner or tenant of commercial premises. Example: a tile falls off the roof of an operations building and damages a car parked nearby.

Operating risk: damage occurring during the company's operating phase. Example: when installing a new washing machine, the worker damages part of the fitted kitchen, which then needs to be replaced.

Product-related risk: damage caused by a manufacturing or design defect in products. Example: a component of a coffee machine from the company’s range tends to overheat, which can cause fires.

Moreover, various specific risks may be included in a policy. Company civil liability insurance, however, does not cover the damage caused by the entrepreneur himself or by a family member.

Individuals who are self-employed – such as doctors, pharmacists and architects – are free to take out professional civil liability insurance. This covers the risks specific to their profession.

Property insurance

There are two types of property insurance: real estate insurance and personal property insurance (goods, machines, tools, computers, vehicles, etc.).

Entrepreneurs only need to take out real estate insurance if they are carrying out their activity on their own property. Anything inside the building is considered personal property. Essentially, property insurance covers natural damage, fire, break-in and, partially, glass breakage. The necessary cover depends, to a large extent, on the sector (Non-life insurance).

Operating loss insurance

This covers the financial consequences of an interruption of operation (direct costs and loss of profit). Operating loss insurance may be taken out for nearly all risks. It is particularly useful to companies that have no option of moving their production.

Tip: it is also worth taking out legal protection insurance. This covers the costs arising from legal proceedings or defense against unjustified claims.

Machine and IT insurance

Machine insurance (or general insurance for all technical installations) covers the damage sustained by machines, devices, instruments and other technical systems, caused by the entrepreneur himself or by a third party. Insurance solutions also exist for IT systems.

Often underestimated, health matters are crucial for a company. To avoid bankruptcy and continue the business in the event of any problems, the entrepreneur must be insured against illness, accident, disability and death. The risk of incapacity for work due to illness can be covered by daily allowance insurance (maximum indemnification of two years). Business stoppage due to an accident is covered by accident insurance.

In cases of disability, this can become more complicated. It is possible to increase benefits covered in the company pension fund, or be insured under private insurance, for example. This also applies for death: an entrepreneur with dependent family members should have more insurance than a young, single entrepreneur.

Swiss Export Risk Insurance (SERV)

SERV covers the risks associated with exporting goods, such as commercial risks (for example, client’s insolvency) and political risks (for example, extraordinary government measures, civil disorder, boycott, blocked currency transfer) in the country of destination.

Supplier credit insurance is one of the main offers within SERV: this covers the risks associated with claims resulting from export operations. Insurance against manufacturing risk, also much in demand, protects the exporter against the risk of interruption in production. SERV also offers solutions favoring the level of liquidity of exporting SMEs, such as manufacturing loan insurance and “Bonds” cover.

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