Insurance, not just compulsory but essential

Within a company or association, like in your private life, not planning for the worst can be very costly: losses, accidents, disasters of all kinds can be a nasty surprise in the best cases, and lead to the end of your business in the worst.  Of course, it is not possible to defend against everything; a good number of insurance plans are also "optional", but the law requires a series of obligations...

Which types of insurance are compulsory for self-employed workers, liberal professions and associations?

Covering the risks for yourself is a choice that you can make knowingly (or not), but the law sets out a certain number of obligations when it comes to liability towards third parties (your customers, your workers, etc.).  But which insurance coverages?

Civil motor liability

Whether you own just one or several vehicles, vans or not, both in your professional and personal life, the subscription to civil motor liability insurance is required by law.  In case of an accident, all damages caused to third parties are covered.  Of course, there is nothing to stop you from covering damage caused to your own vehicle as well, but this cover is optional.  Among the optional insurances related to vehicles, you can even choose to take out driver insurance, foreign travel insurance, a policy covering any goods transported, or even "legal protection" which helps cover the costs related to your legal defence.

Accidents at work

If you employ personnel, you must take out insurance for accidents at work.  The idea is obviously to cover your workers in case an accident occurs during their work, in the workplace, or even on their way to work.   Your social secretariat for employers may arrange this for you.  If you "opt out of" this insurance, the worker will still be indemnified by the Occupational Injuries Fund, which will pursue you in this regard.

If, as an ASBL (non-for-profit organisation in Belgium), you use voluntary workers (volunteers), you must take out a Volunteer insurance for them. This insurance covers civil liability and personal injury accidents. It is free for 200 days of voluntary work per year and per association.

Civil liability in case of fire or explosion

If your activity is carried out on premises accessible to the public, damage to persons or property caused to third parties (by a fire, explosion, etc.) engages your liability, whether you are to blame or not!  This is the notion of objective liability.  Such an insurance is compulsory for premises accessible to the public (catering establishments, retail stores, etc.)

Professional liability

When your activity involves certain commitments to your customers, there is a risk of the latter making a complaint against you based on professional misconduct.  For some professionals, such as accountants, physiotherapists and architects, insurance covering damages arising from your professional misconduct is compulsory.   For others, this is a choice which should be considered carefully.

And is this costly legal minimum sufficient?

To ask the question is to answer it: beyond these legal insurance plans, there is a huge range of more or less essential insurance products such as operating loss insurance, machine failure insurance, stick insurance, etc. It is up to you to determine the risks present, the consequences that may arise therefrom, and the price you must pay to minimise the impact!

Property insurance

Property insurance protects your property, which is to say the assets related to your company.  In principle, you are insured against a fire or explosion, but what happens if a skylight is damaged by hail, if vandals destroy your goods, or even if fresh foods perish in the refrigerators following a power cut?  This is the purpose of operating loss insurance.  It not only covers the goods damaged, but also the impact of the incident on your business.

If your production, your sales, or your services are temporarily suspended following a fire, you lose your source of income, but your operating costs (salaries, rents, loan repayments, etc.) do not disappear. Not only does operating loss insurance cover these permanent costs, it also covers additional costs: for example, the temporary lease of another property, or the obligation for third parties to help with current orders. The operating loss insurance is a customised policy based on the sector and the self-employed worker's activity because each case is different.  A good broker will advise you effectively by identifying the risks you are perhaps unaware of, and will suggest solutions to cover them.  The decision is yours...

Personal insurance

As a self-employed worker, you are entitled to social security, but you know that this system often offers poor coverage.  Life insurance, disability insurance, and guaranteed income insurance cover these risks you are exposed to as a person allowing you to maintain your lifestyle during a period of illness or after an accident.

The " guaranteed income" insurance in case of incapacity for work, for example, pays out a replacement income for a determined period after a waiting period to be determined (generally one month).  Knowing the limits of the social status of self-employed workers, this insurance is very tempting, but expensive.  When you exercise your activity within a company, this guarantee can be partially covered by a group insurance policy which is more interesting.  Again, a good broker will help you to make the right decision.

But how can you navigate this jungle?

It is not unusual for an entrepreneur (as well as an individual) to have several overlapping insurance policies covering the same risk several times while other risks are left uncovered. 

Under insured or over insured? Both are a waste of money.  More than ever, the approved insurance broker is becoming an essential partner, so choose wisely.  Of course, we need to use them less than we do an accountant, for example. However, the consequences of a poor decision are sometimes disastrous!

Good to know: avoid the blacklist...

The "black list" means the RSR file ("special risks") containing the details of people representing "special risks" in terms of insurances.  For insurers, a risk is special when it is clearly higher than the average risk calculated statistically for a given category or group of risks.

In principle, insurers cannot exclude you purely and simply based on the sole reason that your name appears in the RSR file; however, they may apply pricing to deter you.

In 95% of cases, people on this list are there due to missed payments, a very high number of claims, or even due to a false declaration when subscribing to an insurance policy or following an accident (registered as "increased risk").

Records due to non-payment of premiums are conserved for 3 years. All other types of records are conserved for 5 years unless they concern an "aggravated risk", in which case they are conserved for 10 years.

Datasur is obliged to inform you of your record, which you can choose to contest with Datasur (FR) in the first instance and then with the insurance ombudsman if necessary.

Want to know more?

To find out more about the different insurances and the essential partners such as brokers, see the websites of Assuralia (professional union for insurance companies) and Feprabel (FR - federation of insurance brokers and financial intermediaries in Belgium).

Updated 25/07/2018

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