What is business liability insurance?
Business liability insurance (Bedrijfsaansprakelijkheidsverzekering or AVB in Dutch) is a type of insurance that protects your business against damage caused by your work, products, and in other situations. Any business that comes into contact with others can cause damage and be liable for it. The value of this liability can be a small sum, but it can also be substantial, putting your business at risk.
For example, if you knock over a cup of coffee, damaging your customer’s laptop. Or if your employee stumbles and breaks a valuable vase at a customer's house. But also if the floor in your shop is slippery and someone falls and breaks a leg.
An accident can easily happen, and because the number of liability claims increases every year, it is sensible to take out business liability insurance. More than 90% of businesses in the Netherlands do this, including freelancers and SMEs.
Is business liability insurance mandatory?
Business liability insurance is not generally mandatory. However, there are situations in which you do need to take out business liability insurance. A client or supplier can ask for it. Or your trade or industry association can demand it.
What is covered by business liability insurance?
A typical bedrijfsaansprakelijkheidsverzekering policy in the Netherlands can include but is not limited to:
- damage caused by work carried out by you or an employee
- damage caused by your products
- damage to an employee's belongings
- damage to equipment that you rent or borrow
- damage to buildings
Read the policy conditions
What is covered and what is not depends on your insurance company. And the conditions of your insurance policy. Always read the policy conditions carefully. You can ask an independent insurance advisor for advice.
What is not usually covered by business liability insurance?
The following situations are not covered:
- giving the wrong advice. You need professional indemnity insurance for this;
- damage to yourself or your business;
- damage or costs you incur to redeliver your service or product;
- environmental damage on a business premises;
- damage caused by intent and recklessness;
- damage caused by a motor vehicle, vessel, or drone.