Business insurance – what it covers and what it costs

Business insurance protects your company's property, its income and its liability towards others. It is usually a package of several parts: property, business interruption, liability and legal protection. You can add cover such as cyber or D&O on top. What it costs depends on what the company does, how big it is and how much it has to protect.

What is business insurance?

Business insurance covers the business itself, not you as a private person. It steps in if something happens to what the company owns, if the business is forced to stop, or if the company causes damage to someone else.

The term is used in two ways. Sometimes it means a package: a combined business insurance policy with several parts in one contract. Sometimes it means every policy a company holds, such as motor insurance, cyber insurance and insurance for staff. This page is mostly about the package, because that is where most small and medium-sized companies start.

No ready-made package fits everyone. What is included, how high the limits are and what is excluded varies between insurers and between policy terms. That is why it pays to know what your own company actually has.

What is usually included

Most combined business insurance policies are built on the same foundation. The exact scope is always in the policy terms.

Property

The company's things, such as furniture, computers, machinery and stock, if they are damaged by fire, water or theft, for example. Read more about property insurance.

Business interruption

Lost gross profit, meaning revenue minus the costs you no longer have, plus extra costs, when an insured loss stops the business from running as normal. Read more about business interruption insurance.

Liability

If the company becomes liable to pay damages for injuring a person or damaging someone else's property. The insurer investigates the claim and pays if it is justified. Read more about liability insurance.

Legal protection

Part of the cost of lawyers and court proceedings if the company ends up in a dispute. Read more about legal protection insurance.

Common add-ons

Beyond the foundation there is cover that many companies need, but not all. It is bought as an add-on or as a separate policy:

• Cyber insurance: help and compensation after a data breach, an extortion attempt or when your systems are down.
• D&O insurance: protects the management personally if they are sued for decisions made in their role.
• Crime insurance: if the company loses money through fraud, embezzlement or someone posing as a supplier.
• Professional indemnity: for companies that sell advice and services, where a mistake causes a financial loss rather than physical damage.
• Business travel: medical care, repatriation and luggage when you or your staff travel for work.
• Vehicles: cars and other vehicles the company owns. Trafikförsäkring, Sweden's compulsory motor third-party insurance, is required for any vehicle used on the road.

What does business insurance cost?

There is no fixed price. The premium is set by how large the insurer judges the risk to be, and every insurer bases that judgement on roughly the same things:

• What the company does. An accounting firm and a construction company carry completely different risks.
• How big it is. Turnover and headcount affect the liability and business interruption parts in particular.
• How much there is to protect. The value of furniture, machinery and stock.
• Claims history. Many or large claims in recent years usually mean a higher premium.
• Deductible and scope. A higher deductible can lower the premium; more add-ons raise it. The guide how to choose your deductible shows how to work it out.

For more depth, there is a separate guide on what business insurance costs and how to avoid paying too much.

What cover do different companies need?

The foundation is often the same, but the emphasis differs:

• Consultants and advisers mainly need cover for financial losses they cause their clients. Read more about insurance for consultants, IT consultants, accounting firms and advertising and communications agencies.
• Retail and e-commerce have stock to protect and may need product liability for what they sell.
• Construction and trades have tools and machinery out on jobs and a greater liability for damage to customers' property.
• Transport and haulage have their vehicles and the liability for their customers' goods.
• Companies with customer data and digital systems have the most to lose from a data breach. For them, cyber matters more than for many others.

A good first step is to go through what you already have. Many companies have gaps where they need cover and double cover where they don't. The guide which insurance does my company need walks you through it step by step.

Is business insurance compulsory?

No, there is no general legal requirement. There are exceptions, such as trafikförsäkring for vehicles and liability insurance in certain professions, and customers, landlords or lenders often require the company to be insured. Read more in the guide Is business insurance compulsory?.

How Coverly helps

Coverly is a digital business insurance service backed by Max Matthiessen. You sign a power of attorney with BankID, Sweden's electronic ID, and the company's policies are collected. Your adviser goes through what they cover and compares them with other options. You get everything in one place, and nothing changes without your approval.

Frequently asked questions

What is the difference between business insurance and liability insurance?

Liability insurance is part of most business insurance policies. Business insurance brings several types of cover together in one policy: property, business interruption, liability and legal protection. Liability insurance is one of them and only applies when the company is liable to pay damages to someone else.

Do I need business insurance if I am a sole trader?

Your home insurance usually does not cover property or liability connected with running a business. If you run a business, whatever its legal form, it is worth checking whether it needs its own cover.

Can I switch business insurance at any time?

It depends on the contract. Many business insurance policies run for one year at a time and renew automatically, and the easiest time to switch is at renewal. Make sure the new cover starts on the same day the old one ends.