Insurance for start-ups: liability policy

As the owner of a start-up, you have plenty to deal with. Finding premises, raising your start-up capital, building up your customer portfolio and lots more. But one of the most important aspects is insuring your business. In this new series of blog posts, we set out the most crucial forms of insurance for start-ups. Today: liability insurance.

Insurance for start-ups: liability policy

As the name suggests, liability insurance covers you as a business-owner in case you or an employee are held liable for an error or omission which leads to a third party suffering a loss. Damages for such losses tend to be high and can threaten your business’s viability.

Liability insurance

There are several classes of legal liability insurance. Each class focuses on a different kind of liability.

For example, there’s public liability, product/completed operations liability, professional indemnity and directors’ & officers’ liability. These four classes of insurance form the basis of a good package of insurance. We’ll explain for you what each class covers.

1. Public liability

Public liability is designed to cover losses which relate to your professional activities but are extra-contractual in nature. In and outside your business.

Some examples of losses covered:

  • You knock over a vase while visiting a customer;
  • You drop your bucket onto a car while cleaning windows;
  • A customer slips over in your office.

2. Product/completed operations liability

Product/completed operations liability insurance is designed to cover losses caused by your products malfunctioning after delivery or by works after they are carried out.

Some examples of losses covered:

  • You repair a central heating system as a plumber and the next day there’s a big puddle of water on the customer’s floor;
  • You install an alarm system in a customer’s home and it doesn’t work.

3. Professional liability

Professional indemnity insurance covers losses due to an intellectual error or omission in the exercise of your professional occupation. Losses are therefore contractual in nature.

As a result, this insurance is mainly relevant for IT and business consultants, lawyers, translators, HR managers, doctors and other professions which mainly involve intellectual services.

Some examples of losses covered:

  • A translation agency makes a mistake when translating a brochure from English to Dutch and the brochure is distributed;
  • A financial intermediary gives incorrect advice about an investment product;
  • A lawyer is too late in filing an appeal.

4. Directors' and officers' liability

A directors’ and officers’ liability or D&O policy covers the personal liability of directors and officers for errors and omissions committed in the day-to-day management of a company.

The policy protects directors’ and officers’ personal assets against financial loss if they are held liable.

Some examples of losses covered:

  • Entering into a contract that’s clearly unfavorable for the company;
  • You’re accused of a possible infringement of environmental law, leading to court proceedings;
  • Failure to present the financial statements to the AGM.

Find out more

Any questions about your liability? Not sure which classes of liability might apply to you as a business-owner?

You can contact us straight away on +32 (0)3 217 67 53 or email

Read part 2 Insurance for startups here: accident-at-work insurance

Read part 3 Insurance for startups here: insuring your company cars

Jesse Mertens

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