As a self-employed person, you are not obliged to take out necessary insurance, but it is recommended. As a self-employed person, you are not entitled to, for example, unemployment benefits or WIA benefits. An employee is protected by mandatory insurance that must be taken out, this obligation does not apply to the self-employed entrepreneur. You do not have to take any measures, but the consequences can be serious. There is no safety net when you become incapacitated for work. The income stops and in order to make ends meet you may eventually have to turn to the municipality. Don’t forget the danger of being held liable by customers for damage caused by you. The insurance policies below are not mandatory, but it is wise to take out.
This insurance is often omitted by self-employed people in the start-up phase. They do this because they cannot afford to pay the high monthly premium. The amount of the premium depends, among other things, on the sector in which the entrepreneur works, age, the waiting period (deductible) and the insured amount. This insurance must be taken out to prevent loss of income in the event of illness. The premium is high because it is a major financial risk that you have to cover. This may possibly involve a monthly amount to be paid out until retirement age. The monthly premium starts at approximately 200 per month.
Insure the things
If you, as a self-employed person, are completely dependent on tools or equipment, check to what extent they are already covered by your current insurance. Valuable supplies that you need for business are probably excluded from your home contents insurance. What happens to your turnover after fire or theft of parts of your inventory? You must prevent your business from coming to a standstill if you no longer have access to your inventory.
What happens in the event of damage due to negligence?
As an entrepreneur you can be held liable for damage caused by you. This not only concerns material damage, but a third party can also suffer damage due to incorrect advice. You can insure the risk by taking out liability insurance for professions or companies. For example, as a contractor you can deliver an incorrect construction or as a consultant you can provide advice that will cause financial damage to your customer. The amount of the premium depends on many factors. The insurer must estimate the chance that you will be contacted by a customer and the amount of the claim.
Self-employed persons must take care of their own pension accrual
A self-employed person who makes no other arrangements will only be entitled to an AOW pension after retirement, possibly supplemented with a small pension from previous employment. A pension can be built up by reserving part of the profit as a retirement provision. Another option is to deposit an amount annually or monthly into an annuity insurance policy or annuity savings account. The premium you have to pay for this is now deductible. As soon as the insurance pays out (after retirement), the installments will be taxed.
Want to take out legal expenses insurance?
You can also take out legal expenses insurance to cover legal costs in the event that you are sued. You can also use the insurance to sue third parties. Legal expenses insurance can also be used to enforce payments from clients.