Which insurances are mandatory for your business in Denmark in 2023?
In this blog, you can learn which insurances are mandatory for your business in Denmark in 2023.
Together with your insurer, it would help if you looked at the needs of your business so that together you can find the best insurance solution for you.
Your insurance needs are determined by looking at your turnover, the size of your inventory, the value of your equipment, machinery, cars, premises, number of employees, sector and other factors.
You can also contact an insurance broker.
Insurance brokers often have a field in which they specialise and know your options.
Our clients typically use these insurance companies:
We have been clients with TRYG ourselves for a long time and have been satisfied with their services.
Businesses have different requirements for which insurance they must take out according to legislation (“need to have”) and which insurance they might need (“nice to have”).
In this blog, you can read about the following:
1. Insurances that are mandatory for a business to take out
2. Insurances that businesses can choose to take out voluntarily
Regardless of the insurance you choose, you should always make sure you familiarise yourself with the insurance you choose.
If the insurance company refuses to recognise a claim, it can be disastrous for your finances and business.
Insurances that are mandatory for businesses to take out
When you run a business in Denmark, some insurances are compulsory by law:
Worker’s Compensation Insurance
When you have employees, occupational injury insurance is compulsory.
We call this “Worker’s Compensation Insurance”.
This insurance compensates your employees for accidents and illnesses directly caused by the work or their working conditions.
Occupational injury insurance only covers permanent injuries.
You cover injuries that are not permanent but result in sick leave as an employer and by the public authorities in the form of sickness benefits paid to the employee.
Employees can always claim compensation against the company even if an injury is not permanent.
You can use a separate liability insurance policy to mitigate this potential risk.
Read more about liability insurance later in this blog.
As an employer, you are legally required to take out occupational injury insurance for all your employees.
The same applies to shareholders and partners if they work in the company.
For example, if you own an ApS or an A/S and work as a director.
Occupational injury insurance must be taken out regardless of whether the employee is salaried or only works a few hours a week.
This applies both in the case of temporary employment and in the case of permanent employment.
Labour Market Insurance for Occupational Disease
In addition to the statutory Occupational Injury Insurance, there are as many as eight different employer contributions that you pay as an employer.
One of these employer contributions is the Labour Market Insurance for Occupational Disease.
This insurance is also known in its show versions as “AES”.
This compulsory insurance covers occupational diseases that do not result from work-related injuries.
You pay the Labour Market Occupational Sickness Insurance (AES) through a single payment with the seven other employer’s contributions.
Collecting these eight employer contributions is called the “Samlet Betaling” in Danish.
Your industry code and the number of employees determine the total contribution amount.
Vehicle Liability Insurance for Cars
You must take out compulsory Vehicle Liability Insurance if your business has a car.
This applies to both registered and non-registered vehicles.
You can also take out voluntary comprehensive insurance (called “Kaskoforsikring” in Danish), which often covers theft, vandalism and other damage.
If you use your private car for business, check whether your current Vehicle Liability Insurance Policy needs to be changed.
Professional Indemnity Insurance for Advisors
If your business provides advisory services, you may need to take out compulsory Professional Indemnity Insurance to cover liability for your advisory services.
This is typically relevant for:
Certified Public Accountants
And there may also be situations where it is not a legal requirement but still a good idea.
Adviser Liability Insurance covers where your business is liable for providing advice if your client has lost money.
If in doubt, ask your insurer if your industry requires Adviser Liability Insurance.
And remember to check the contract with your client for any requirement for you to have Adviser Liability Insurance.
Drone Liability Insurance
If your business uses drones in its work, it is required by law to take out Drone Liability Insurance.
Remember that you also need a Drone Licence.
Insurances that your business can choose to take out
You and your business are vulnerable in the event of accidents and incidents.
That’s why taking out insurance against a wide range of potential risks is tempting.
But of course, it costs money to be insured against everything.
Therefore, you must consider and assess what insurance you need for your business and what daily risks you and your business face.
If you are ok with taking a risk, you do not always have to insure against it.
But you need to understand that there is a potential risk and a possible financial liability or loss in an accident or mishap.
Here are some insurance policies you can choose to take out:
If you own the building where you run your business, you should take out Building Insurance.
Commercial property is not legally required to have this type of insurance.
However, this insurance is usually compulsory if you owe money to the bank on the property.
The insurance covers damage caused by fire, lightning strikes and explosions.
It also usually covers damage to installations related to the operation of the building.
Product Liability Insurance
Product Liability Insurance covers the liability of a manufacturer or seller if the products sold cause damage to other people or property.
You can take out Transport Insurance if you ship goods to Denmark or outside Denmark.
This insurance covers damage and loss of goods during import and export.
Liability Insurance covers damage caused by an employee in the exercise of their profession.
This can be damage to property or other people.
The insurance often also covers the employee’s liability against the business concerning an injury.
Business Interruption Insurance
Business Interruption Insurance covers you if you experience a drop in turnover after a recognised loss.
It helps cover fixed costs such as salaries or additional charges if your premises cannot be used for some time.
Business Interruption Insurance for customers
Business Interruption Insurance for customers provides cover if an employee or the business negligently causes a customer to lose revenue due to work performance.
Sickness Benefit Insurance for Employees
Sickness Benefit Insurance for private employers covers employees’ absence from the company from the 3rd day of illness.
It is also possible to purchase extended insurance that covers from the 1st day.
It is your municipality that offers Sickness Benefit Insurance.
Without Sickness Benefit Insurance, the business must generally cover employees’ first 30 days of sickness.
Equipment, Machinery, and IT Insurance
These insurances cover damage to production and IT equipment.
Some banks offer to insure your online banking against losses from hacking.
Cyber Insurance will protect you against losses from cyberattacks, breaches of data and similar It-related issues.
Directors and Board Members Liability Insurance
This insurance will protect Directors and Board members against legal claims resulting from their decisions.
Key Person Insurance
A Key Person Insurance will compensate the business if a key employee gets ill, is disabled, or dies during the transition.
Insurances you can take out as a self-employed person (sole trader)
Business Insurance Policies cover your business against different types of risks.
In addition, as a self-employed person, you can take out Insurance Policies that cover yourself, which should often also be considered before deciding which Insurance Policies to take out for your business.
Workers’ Compensation Insurance for Self-employed Persons (sole proprietors)
As a self-employed person (sole proprietor), you can also take out Occupational Injury Insurance that covers you and your partner if your partner is an assisting spouse.
This insurance for self-employed persons (sole proprietors) is not compulsory by law, but it may be a good idea for you to be insured against accidents during working hours.
Sickness Benefit Insurance for Self-employed Persons (sole proprietors)
Sickness Benefit Insurance for Self-employed persons (sole proprietors) covers your absence from work from the 3rd day of illness.
It is also possible to purchase extended insurance that covers you from the 1st day.
Your municipality offers sickness benefit insurance.
If you are self-employed (sole proprietor), you must pay for the first 14 days without Sickness Benefit Insurance.
Accident Insurance for Self-employed Persons (sole proprietorships)
Your private Accident Insurance only sometimes covers you at work.
Therefore, you can take out Accident Insurance that covers you at work.
Insurances when running your own business at home
The majority of entrepreneurs need more capital to start with.
There are usually a lot of start-up costs, so it is often advantageous to start the business from your home to save on charges until the business takes off.
However, you can only sometimes assume that your home contents insurance policy will provide sufficient coverage when you run your business from home.
You, therefore, need to separate the items belonging to the business and you personally.
You should then check whether your business equipment is covered by your home contents insurance before deciding what insurance you need for your business.
There may be special requirements for locking systems, alarms, grilles, fireproof cupboards, etc.
If you have customers who visit you in your private home, you may also benefit from having professional liability insurance.
(This blog has been updated: 25.4.2023)