Discover how business insurance works in the Netherlands, from personal policies to income protection and liability insurance.
If you’re starting up your own business in the Netherlands, you’ll need to be aware of the various insurance policies you’ll require to protect your company, staff, and profits.
In this guide, we explain how business insurance works in the Netherlands. This includes the different types of personal insurance entrepreneurs require and how to ensure your company’s possessions are protected.
Insurance for self-employed workers in the Netherlands
Independent entrepreneurs face different risks to employees. These include not having any income if they’re unable to work due to illness or an accident, or being held responsible for mistakes or damage caused by their company.
Before starting up a company in the Netherlands, evaluate the possible risks in your line of business. Ensure you have adequate insurance in place.
Types of personal insurance
Every resident of the Netherlands pays a nominal premium for basic health insurance. Residents pay this directly to a health insurance company. Many people also take out additional insurance to cover them against health risks.
In addition, the Tax Administration collects an income-related contribution on top of the standard premium. It works like this:
If you are a part-time entrepreneur and part-time employee, your salary as an employee is taxed in accordance with employee rules, before the income-related contribution you’ve earned as an entrepreneur is taken into account. If you have low earnings, you can receive a care allowance from the government.
You can find out more in our guide on the Dutch health insurance system.
Incapacity for work and invalidity
Full-time independent entrepreneurs must have coverage in the form of compulsory invalidity insurance. This comes in two forms: private and voluntary.
Private invalidity insurance
Before taking out private invalidity insurance, work out how much cover you’ll need. As a rule of thumb, this tends to be 80% of income. You can change the amount during the insurance term. You can also arrange for payments to increase by a certain percentage every year.
Voluntary invalidity insurance
If you meet the requirements posed by the Employee Insurance Agency (UWV) you could take out voluntary invalidity insurance to cover illness and invalidity.
This form of insurance is similar to employee insurances for illness and disability. The voluntary ZW insurance pays up to a maximum of 104 weeks (two years). After this period, you can take out WIA insurance. Maximum payments under both insurances are based on the daily income you earn as an independent entrepreneur.
Voluntary insurance plans can only be taken out if you previously had compulsory insurance against the financial consequences of illness for at least one year.
Accident insurance plans usually pay out a lump sum if you become partially or completely disabled as a result of an accident in the workplace.
Pension insurance and annuity policies
Every inhabitant of the Netherlands receives AOW. This is a national old-age pension, with the age you receive it depending on when you were born. This is only a basic pension, which may not be sufficient to live on.
Therefore, it’s a good idea to build up a supplementary pension through a pension insurance scheme. You could take out an annuity policy or another type of savings scheme.
Entrepreneurs and pregnancy
Female entrepreneurs may claim a pregnancy and maternity benefit for a minimum of 16 weeks. This is the Maternity Benefit Scheme for the Self-employed (ZEZ). Female entrepreneurs may claim the statutory minimum wages.
Independent female entrepreneurs who worked at least 1,225 hours in the year preceding their application will receive a full benefit. For entrepreneurs who worked fewer than 1,225 hours, the benefit depends on their income during the year preceding their application.
Professional insurance in the Netherlands
Business and professional liability insurance
An entrepreneur runs specific risks when doing business. For example, a client may hold you responsible for the delivery of defective goods or for not having performed services correctly. If you are actually liable for the damage caused by defective goods and services, you pay compensation.
Liability for damages is not only for purely material damages. You may also have to compensate for damage caused to your client’s property while working for him, or employees might claim loss of income if they can no longer work due to an accident while working for you.
Business liability insurance
Business liability insurance covers the damage occurred while running a business. For example, if you are a building constructor and drop a brick on a parked car, the insurance will pay for the damage for which you are responsible.
The policy, however, will not cover everything you are responsible for. If your work is poor quality and the client claims compensation, you cannot recover this from your insurance. Claims arising from breaches of contract are also not eligible for compensation from the insurance company.
Professional liability insurance
If you are a professional, your client may suffer damages as a result of inaccurate acting or incorrect information on your part.
In case you advise a client to undertake specific action, which then has adverse effects, your client may suffer considerable damages. If they then hold you responsible and you are liable, your insurance pays the compensation because it is a professional risk.
How much you’ll pay in premiums depends on your profession and the size of your enterprise.
Legal expenses insurance
Conflicts and disputes arise in business, and can lead to unexpected expenses, especially if the dispute ends up in court. If you have legal expenses insurance, your insurer will see to it that you are assisted by a lawyer.
The expenses are usually paid or reimbursed by the insurance company. Not all legal assistance is covered by legal expenses insurance, so check with the insurer which type of disputes are included and which costs will not be reimbursed.
Insurance for goods, machinery and equipment; buildings insurance
All goods and products you hold are at your own risk. If fire breaks out, or your business premises are burgled, this could bring about a considerable loss.
With this in mind, analyse the existing risks, take out proper insurance and check the conditions of the policy carefully. Security or fire prevention measures, such as sprinklers, are usually necessary as part of your policy terms and conditions.
If you are the owner of the building, you probably wish to insure the premises themselves with a building insurance policy that covers damages caused by instances such as fire, lightning or explosions. Damage to windows tends not covered by a building insurance – for this you will have to take out separate glass insurance.
As well as the insurer, banks may pose certain conditions before granting you a loan for investing in your business. If you have a bank loan to finance the business premises or machinery, the bank often stipulates that you take out buildings insurance.
You need transport insurance if you are responsible for the transportation of the goods until they arrive at their destination. If your business transports the goods itself, take out insurance for covering the risks during transportation.
Not all debtors will pay the invoices you send them – they may be involved in bankruptcy proceedings, or suspension of payments might have been granted. A debtor could also dispute an invoice and refuse to pay.
Credit insurance will pay the invoiced amount, but the insurer will probably check your accounts receivable portfolio before insuring you. The insurance company will not accept invoices sent to clients with bad creditworthiness.
General terms and conditions
Applying General Terms and Conditions (GTC) to all the contracts with your clients or customers makes clear to them what terms and conditions you apply for services, payments, purchase or sales orders, etc.
GTC may help to avoid awkward discussions or conflicts, because each party’s rights and obligations are defined. Please note that especially larger companies and organisations usually apply their own GTC and may, therefore, be unwilling to accept yours.
The following terms and conditions are usually part of the GTC:
- offer – without obligation or not, term for acceptance;
- transportation – responsibility for transportation costs, insurance and import duties;
- delivery term – definition of circumstances beyond a party’s control;
- retention of title – when will the other party become the goods’ owner (e.g. after payment);
- guarantee – if a guarantee is provided, terms and conditions;
- dispute resolution – competent court or arbitration;
- liability – limitation of liability, total amount of damages to be paid.
Under Dutch law, terms and conditions GTC may not be unreasonably onerous – for example you may not impose terms and conditions that would not be fair on the other party, and vice versa.
Applying GTC will only be valid if the other party is aware before signing the contract, and if both parties apply GTC, you will need to decide whose conditions apply.
Long-distance sales and purchases
If you are involved in the long-distance selling of products or services in the Netherlands (e.g., selling via the Internet, by telephone, by fax, or by post) you must comply with rules such as the business’ obligation to provide information and the customer’s right to return what he or she purchased.
More information on being a freelancer in the Netherlands
The Ministry of Social Affairs and Employment has made available brochures in different languages with information on working in the Netherlands, the minimum wage, and rights and obligations of employees from EU countries.