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Insurances in the company

When you start your business, you need to assess what insurance to be drawn. Some insurances are mandatory other are optional.

When you need to assess your insurance needs of the company, you can divide it into the following groups:

  • Insurances which the owner may subscribe
  • Insurances which is compulsory for the company to draw
  • Insurance company may sign

1) Insurances which the owner may subscribe

The company´s insurance and insurance the owner needs is not the same. The company´s insurances are insuring the company´s activities against risks.
Owners insurance only covers the person behind the company and must be paid by the owner personally – if it is a sole propriety company.

The owner can draw the following insurances:

Sickness Insurance
As an independent, you are entitled to sickness benefits from the municipality after 14 days if you become ill. However, you must meet the statutory sickness benefits conditions which say that you must have been self-employed within the last 12 months and had sufficient profits of the company.

You can take out a supplementary insurance, so you can get sickness benefits from day 2.
The voluntary insurance taken out with the Civil Administration

Labour Market Occupational Diseases - AES
AES allows you to get compensation if you get an occupational disease. An occupational disease is a disease caused by work or working conditions; even if it takes several years from the time they have been exposed to a harmful impact of the disease appear.
Labour Market Occupational is taken out at Borger.dk - AES.

Accidents
Accident Insurance for the owner is subscribed at private insurance companies.

2) The company´s statutory insurance

The following insurances are compulsory when you start a business, i.e. you must take them if you meet certain conditions:

Workers´ Compensation fund

According to the Workers´ Compensation Act an employer that hires people to work in the company is obliged to take out employer insurance. This applies for both paid and unpaid labor.
You can take out employer insurance in most Danish insurance companies.

Labour Market Occupational Diseases (AES)
According to the Workers´ Compensation Act an employer that hires people to work in the company is obliged to take out an occupational insurance. This applies for both paid and unpaid labor.
AES ensures that employees receive an occupational sickness or receive compensation and reimbursement for their sickness.
Read more on Borger.dk - AES.

3) Insurance which minimises the company´s risk

The insurance companies can deliver whatever insurance you can think of. It is jut a matter of the price for the insurance policy. Therefor you have to consider which kind of risk you can live with. It is called risk management.

The most normal insurance is:

Professional indemnity insurance
A professional indemnity insurance covers damages you may cause as an effect of your business. Accountants and lawyers, e.g., are legally obliged to take out such insurance to cover a customer´s loss caused by misleading advice, but also other professions are liable to pay damages:
A mechanic may damage a car engine by wrong calibration and an IT consultant may cause a great loss if s/he messes up a customer´s computer system.

Insurance against loss by fire, theft and water damage
These are the basic elements of insurance that all businessmen and women should take out. In many ways this corresponds to your household furniture insurance, but includes business property coverage, which is not normally covered by household furniture insurance.

Consequential loss insurance
While insurance against loss by fire, theft and water damage covers the direct damage, consequential loss insurance covers the profit loss resulting from long term business interruption caused by fire, etc.

Project insurance
Some craftsmen take out separate insurance providing coverage dedicated to one individual large-scale construction project.

Transport insurance
Haulage contractors, shipping agents and others in the transport industry as well as companies with large freight needs should take out proper insurance. Cargo in transit risks theft, damage, traffic accident, loss of vessel, etc.

Insurance consultancy

The insurance industry is tangled and unknown territory to most entrepreneurs. Therefore, it would be wise to seek assistance. This can be done in several ways:

You can consult an insurance company and ask for their assistance. They offer good advice in terms of identifying the risk coverage you need, but you can not be sure that the agent offers you the cheapest solution. S/he is obviously bound by the solutions offered by the specific insurance company.

Insurance consultancies specialised in business consulting can help you find the best possible coverage at the lowest cost. Some consultancies are definitely serious, but, like within other trades, also here you risk running into some who are not.

Another solution is to ask your accountant. Only a few accountants are insurance experts, however, most are fairly experienced in the field.

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