Mandatory Business Insurances
When starting a business, there are a number of mandatory business insurance policies that are important to have in place to avoid fines, sanctions, and most importantly, to ensure you're properly covered in case of an accident. At Söderberg & Partners, we offer advice on business insurance and can help you find the right coverage for your company. So read on here to get an overview of the most important mandatory business insurance policies.
What Are the Mandatory Insurances for Businesses?
Mandatory business insurances are policies required by law for companies in certain industries or situations. The purpose of these mandatory liability insurances is to protect the company's customers from financial losses caused by the company's insufficient advice and/or any other actions or omissions that result in damage or loss to the customer.
There are several mandatory business insurances that a company must have. Some examples of these insurances are:
Workers' compensation insurance
Workers' compensation insurance is a mandatory insurance that all employers in Denmark are required to have. This insurance must cover work-related injuries that employees may sustain while on the job. An accident, according to the Workers' Compensation Insurance Act, refers to personal injuries caused by an event or impact that occurs suddenly or within five days.
If you're operating a sole proprietorship, it is optional to take out workers' compensation insurance, although it is recommended.
Get an overview of how workers' compensation insurance can protect your employees.
General liability insurance
General liability insurance is mandatory for certain professions. When liability insurance is mandatory, it typically applies to high-risk or dangerous areas or advisory services in complex fields where even a small degree of negligence can lead to significant financial losses for the client. This can include professions such as architects, engineers, and insurance brokers.
The coverage of this insurance depends on the company's industry and risk profile. It's important to have the correct liability insurance in place so the business is well protected in case of a claim.
Motor liability insurance
If your business uses motor vehicles such as company cars, trucks, or similar, that are registered in Denmark, you must have motor liability insurance.
Motor liability insurance is mandatory for all vehicles that drive on public roads, which also applies to work machines and trucks. The insurance covers damages caused by the vehicle to other people or their property. This could include personal injuries, damage to other vehicles, or damage to buildings and other objects along the road.
The insurance does not cover damage to the company's own vehicle or the driver of the vehicle, as well as buildings and other property owned by the company. These damages can be covered by other types of insurance, such as cargo insurance and auto insurance. It’s important to have motor liability insurance in place to ensure the company can legally drive on public roads.
Occupational disease insurance
Occupational disease insurance is an insurance that covers employees' loss of earning capacity or death as a result of an occupational disease. An occupational disease is a condition caused by the working conditions within a company and is recognized as such by the Danish Workers' Compensation Authority. In addition, it is also advantageous for the business to explore the options for a general liability insurance, as this insurance is crucial to ensure that the company can withstand potentially harmful financial consequences of a compensation claim
Although it's not mandatory to have occupational disease insurance, it can be a good idea to consider if your company has risks where employees could become ill as a result of their work conditions. Additionally, a health insurance plan can be beneficial as it provides financial coverage for health-related costs.
Occupational disease insurance is an arrangement managed by the Danish Workers' Compensation Authority, and businesses contribute to it through the ATP contribution.
Get help from an insurance broker
Business insurance can be complex. Therefore, it can be a good idea to use an insurance broker who can help you navigate the insurance market and find the best solutions that fit your specific needs.
At Söderberg & Partners, our insurance brokers proactively work to ensure your company has the best insurance terms and coverage at the best price. If you're interested in an insurance review, contact us here.
We Often Get These Questions
Mandatory insurances must, among other things, ensure that the company's insurance provider can pay compensation in accordance with applicable Danish law.
There are certain insurances that are mandatory for businesses in Denmark. This includes liability insurance for the company's vehicles and workers' compensation insurance, which covers in the event that an employee is injured while performing work for the company.