Dutch entrepreneurs over-insured for liability

Entrepreneurs in the Netherlands are over-insured against possible damage claims from customers and clients, online bank Knab found in a survey of 4,500 corporate customers. 66 percent of entrepreneurs said they have liability cover, but only 5 percent ever had to pay out damages, AD reports.

In many cases, the amount of damages was also relatively low. In 78 percent of cases, the damage amount was one month's turnover or lower. In 13 percent of cases it was between one and two months' turnover, and in 8 percent of cases higher than that. 

Knab also looked at different sectors, as damage claims in some sectors can be significantly higher than others. In personal services, like hairdressers and beauty salons - a sector not known for major damage claims, 67 percent have liability insurance and less than 1 percent have had to pay out a claim. Construction companies face the most claims. 15 percent of them have had to pay out a claim, and 81 percent are insured against it.

Business services face a different scenario. There few entrepreneurs have faced damage claims, at 3 percent. But the amounts claimed are often high, with 22 percent of successful claims amounting to more than 2 months' turnover.

"Many consultants who work in businesses services advise companies. So if the company's turnover falls due to incorrect advice, a claim can be very high. Then you will be happy if you are properly insured," Knab financial expert Oskar Barendse said to AD. "If the chance that you will cause damage is small and you can easily pay any damage yourself, you can ask yourself whether you need to be insured for it."