Business-Related Insurances

It is necessary to assess the insurance requirements and needs when setting up a business. Depending on the nature of the business, an insurance may be mandatory (statutory) or voluntary. Mandatory insurance includes, for example, the pension and accident insurances for the entrepreneur and the employees, which the entrepreneur/employer is required to cover. Voluntary insurances, on the other hand, are essential for protection against the risks relating to the business operations.

Insurance can be roughly categorized into property insurance (e.g., real estate and auto insurance), personal insurance (e.g. pensions and health insurance) and liability insurance (e.g., product liability insurance [Product Liability], IPR-insurance [IPR Insurances] and directors and officers (D&O) liability insurance). In addition, loss-of-profits insurance may be appropriate in the event of unforeseen disruption to business operations, for example due to an accident.

Insurance companies can provide detailed information regarding the scope and terms of available insurance coverage. In addition to standardized insurance products, insurance companies are often able to tailor insurance coverage for specific situations. It is normally prudent to ask for offers from several insurance companies. All risks cannot be insured against, however, for example if an insurer declines to issue insurance because it would not be profitable. It is important for the enterprises to carefully assess the need for and costs associated with insurance coverage and the business effect of whether certain insurance coverage is obtained or not.

Insurance agreements are discussed in further detail in the chapter [Insurance Contract].