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Self-employed: what insurance do I need?

From old-age pension to commercial liability insurance, AXA’s experts have compiled the key information for you and your company.

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Overview of insurance solutions for self-employed people

It isn’t always easy to maintain an overview of all the different insurance solutions out there. Which types of insurance are mandatory for self-employed people in Switzerland? Which are voluntary? You have to take out several types of insurance when your start your own company. AXA’s insurance check for SMEs helps you to work out what you need in just a few minutes.  We’ve brought together all the information you need here.

The main types of social insurance

The legal form you choose determines which types of social insurance are mandatory. The compensation offices, and in some cases the Swiss National Accident Insurance Fund (Suva), decide who qualifies as self-employed for the purposes of social insurance.

Federal old-age and survivors’ insurance (OASI)

OASI is the first and most important pillar of the Swiss pension system, intended to cover your basic needs in retirement or those of your dependents after your death. OASI is a form of national insurance and is mandatory for everyone living in Switzerland. It’s the only source of income for many pensioners. With this in mind, you should try to avoid any gaps in your OASI contributions.

Disability insurance

Disability insurance is mandatory in Switzerland and also forms part of the first pillar. It covers the basic needs of people affected by disabilities by providing rehabilitation measures or payments.

Loss of earnings compensation

Loss of earnings compensation insurance provides reasonable compensation for income lost through military service or maternity leave. Contributions are mandatory for everyone.

Family allowance

As of January 1, 2013, all self-employed people in Switzerland are subject to the Swiss Federal Family Allowance Act. This means that they are both entitled to receive a family allowance and required to pay contributions. They must therefore register with a family allowance fund in the canton where their business is based.

Insurance against health risks

Crises such as the coronavirus pandemic show how vital it is for self-employed people to have the right health coverage. To avoid bankruptcy and keep their business going through adversity, they need to be covered for sickness, accidents, disability, and death.

  • Daily sickness benefits insurance: This a form of voluntary coverage for the risk of being unable to work due to sickness. It pays benefits for up to two years. For more information, see our  AXA daily sickness benefits insurance overview page.
  • Accident insurance: This covers you if you’re unfit for work after an accident. The Swiss Federal Accident Insurance Act distinguishes between two types of accident insurance:
    • Occupational accident: This is mandatory for all employees. Company founders can insure themselves privately through their health insurer or through their company.
    • Non-occupational accident: This is mandatory for employees who work eight hours a week or more. Company owners can insure themselves privately through their health insurer or through their company.
    • Other types of accident insurance are available in addition to the mandatory ones. For more information, see AXA accident insurance.
  • Things can get more complicated when it comes to disability . You can either take out additional private insurance or increase the benefits covered by your company’s pension fund.
  • The rule of thumb as regards death is that company owners with families that depend on them should make better provision than those who are young and single.

Occupational benefits insurance

Occupational benefits insurance is voluntary for self-employed people with no employees. If you employ any staff earning CHF 21,510 a year or more, occupational benefits contributions are mandatory.

Many self-employed people in Switzerland take out a private pension in the third pillar in addition to their occupational benefits insurance with a view to maintaining the standard of living they’re accustomed to after they retire. 

The main types of business insurance

Companies have more freedom when it comes to choosing business insurance. In principle, a company can decide for itself which risks it wants to cover.

Commercial third-party liability

Voluntary commercial third-party liability insurance is a basic necessity for almost every company. The risks to be insured vary considerably from industry to industry, so it’s advisable to perform a precise risk analysis before taking out liability insurance. The following risks can be covered by commercial third-party liability insurance:

  • Premises risk: losses arising from your liability as the owner or tenant of business premises.
    Example: A brick falls off your building and damages a parked car. 
  • Occupational risk: losses arising from business operations.
    Example: One of your technicians damages a kitchen unit while repairing a customer’s refrigerator, and the unit has to be replaced.
  • Product risk: losses arising due to product manufacturing or design faults.
    Example: A component in your company’s range of barbecues is prone to overheating and could start a fire.
  • Other special risks

Losses caused personally by a company owner or by his or her family aren’t covered by commercial third-party liability insurance.

Professional indemnity insurance

People in professions where self-employment is common, such as doctors, pharmacists, and architects, can take out voluntary professional indemnity insurance that covers the special risks associated with their job. Professional indemnity insurance is mandatory in some industries, such as vehicle maintenance.

Property insurance

There two types of property insurance:

  • Building insurance: Self-employed people only need building insurance if they own their own business premises. Insurance against damage from fire and natural forces is mandatory for building owners. Building liability insurance, on the other hand, is voluntary.
  • Movables insurance: Everything inside a building is regarded as movable property and can be insured on a voluntary basis.
    Example: damage to goods, machinery, tools or computers

Property insurance normally covers damage from fire and natural forces, break-ins, and sometimes glass breakage. The coverage can vary considerable from industry to industry.

Motor vehicle insurance

Anyone who owns a motor vehicle must take out third-party liability insurance for it, but accidental damage insurance is voluntary. Motor vehicle insurance is often referred to simply as car insurance.

Business interruption insurance

This voluntary form of insurance covers the financial impact of your business being interrupted, including directly incurred costs and lost income. Business interruption insurance can be taken out for almost all conceivable risks. It’s especially suitable for companies with little flexibility in their production processes.

Engineering insurance: Machinery and IT insurance

Machinery insurance – also known as equipment breakdown insurance – is voluntary. It covers damage caused by your company or third parties to general technical equipment, electronic instruments and devices, and machinery. Computer systems and other IT equipment can also be insured. Cyber insurance, for example, is steadily gaining importance as the digital transformation gathers pace.

Swiss Export Risk Insurance (SERV)

SERV insures against risks associated with exporting goods, including commercial risks such as insolvency on the part of a customer. It also covers political risks in the destination country, for example extraordinary government measures, civil unrest, embargos or bans on currency exchange.

  • Supplier credit insurance: protects self-employed people against risks attached to export receivables.
  • Pre-shipment risk insurance: protects exporters against risks associated with halting production.
  • Other liquidity solutions for sole proprietorships and medium-sized independent companies that export goods are working capital insurance and the counter guarantee.

Other insurance

Self-employed people in Switzerland can also take out the following types of insurance on a voluntary basis:

  • Transportation insurance: This protects your goods from the point of departure to their destination. 
  • Assembly insurance: This covers the risk of property damage when offloading machinery components and handing a plant over to the customer.
  • Legal protection insurance: Lawyers are on hand to assist you with legal disputes in your day-to-day business and provide advice on legal matters.
  • Directors’ and officers’ liability insurance: You transfer your liability risks to your chosen insurer and benefit from expert advice in the event of a claim.
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Our start-up package for self-employed people

The new-found independence that comes with starting a company raises many questions for new entrepreneurs. AXA’s start-up package answers these questions and equips you to take the first steps toward a successful future. It contains the following benefits and services:

CHF 500 to help you get started: Set up your company online at www.startups.ch – it’s easy, and if you take out two business insurance policies with AXA at the same time, we’ll give you up to CHF 500 toward the start-up costs. The insurance coverage is tailored to your needs. Your advisor will analyze which mandatory and voluntary insurance your business requires.

The accounting solution Accounto: Accounto relieves SMEs and fiduciary companies of time-consuming book-keeping tasks and creates a new and unique understanding of fiduciary business. Each SME can thus benefit from a personalized, digital CFO.

Questions about risks and recommendations: Our checklist takes you step by step through a risk analysis and offers recommendations on how to minimize risks and protect your company. As well as insurance topics, it also deals with ways to prevent losses and motivate employees.

Online legal advice with MyRight.ch: The mass of laws and regulations is virtually impenetrable to anyone who isn’t a lawyer. As a start-up package customer, you can turn to MyRight, the helpful assistant from AXA-ARAG.

What else do self-employed people need to know?

Did you know that self-employed people can’t insure themselves against unemployment? Or that paying into a pension is essential for self-employed people and their families? You can find all the information you need here:

Risks that self-employed people can’t insure against

Self-employed people in Switzerland can’t register with the state unemployment insurance scheme, so they aren’t insured against unemployment.

The right coverage for retirement

Federal old-age and survivors’ insurance (OASI) is the only source of income for many pensioners. With this in mind, you should try to avoid any gaps in your OASI contributions.

Occupational benefits insurance for self-employed people is a good way to supplement the minimal pension offered by OASI. Many self-employed people in Switzerland also take out a private pension in the third pillar with a view to maintaining the standard of living they’re accustomed to after they retire. Our blog “Securely self-employed: optimizing your pension with Pillar 3a” explains the Swiss three-pillar system and the advantages of the various pension solutions for self-employed people.

How do you insure your staff?

Occupational benefits insurance is mandatory for self-employed people who employ anyone earning CHF 21,330 a year or more. You must also insure your staff against occupational accidents. Any employee who works more than eight hours a week must additionally be insured against non-occupational accidents.

How do you protect your family?

Whatever your company’s legal form, it’s important to ensure that your insurance solution suits your family’s needs. Self-employed people with no dependents can improve their risk coverage by paying into Pillar 3a/3b. If you’re living with a partner and have children, you should also pay into an occupational pension (Pillar 2). This will allow you to maintain your whole family’s usual standard of living if you’re unfit for work due to sickness or an accident.

Checklist to read before taking out insurance

Which risks does your company face? Before you sign an insurance contract, read through the questions below to make sure you choose the best possible coverage to suit your needs:

  • What are the existential threats to my company? You should definitely insure against these.
  • How big a loss will I suffer if an accident or other insured event occurs? Adjust your risk protection accordingly.
  • How big a deductible per claim can I afford? Choosing a higher deductible reduces your premium.
  • Which risks are negligible for my business? You might be able to do without insurance for these.

Worried about your financial security?

Are you worried about your financial security as a self-employed person? Take advantage of expert advice from AXA’s insurance specialists. We’ll be happy to help and answer all of your questions about insurance, taking the worry out of setting up and running your own company.

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