Safe in business: Essential insurance for companies in Switzerland

Located in the heart of Europe, Switzerland has a reputation for its stability and economic reliability. For entrepreneurs like you who are chasing the dream of a thriving business, understanding the complexity of the insurance market is essential. This article is intended to give you a comprehensive overview of the insurance required for companies in Switzerland.

Important insurance for Swiss companies

Business liability insurance

Business liability insurance is an indispensable protection for every company. It covers damage that could be caused by your company:

• Investment risk: damage caused by real estate, such as a falling brick.
• Operational risk: Damage that occurs in the course of your business activities, such as a fitter who accidentally damages kitchen equipment.
• Product risk: Liability for damage caused by faulty products, such as a coffee machine, which causes overheating.

More information on mandatory business liability insurance in Switzerland can be found at Swiss Confederation's SME portal.

Corporate liability insurance for Swiss companies

Corporate liability insurance, often referred to as Directors and Officers (D&O) liability insurance, protects executives from damage that occur in their area of responsibility. Corporate liability insurance is a special type of insurance that is of great importance for boards of directors and other corporate bodies in Switzerland. This insurance protects the personal assets of company management and board members from the financial consequences of legal disputes that may result from their business decisions.

Importance of Directors' and Officers' liability liability insurance

Corporate liability insurance is relevant for all types of companies, including AGs, limited liability companies, cooperatives, foundations and associations. It covers management board members, boards of directors and even de facto bodies. This insurance is particularly important because managers are personally liable with their private assets in the event of breaches of duty. For example, decision makers may be held liable for damage caused by negligent monitoring, incorrect decisions, or failure to comply with legal frameworks.

Typical risks and coverage areas of D&O insurance in Switzerland

O&O liability insurance covers a wide range of risks, including:

• Civil and criminal defense costs.
• Compensation payments for justified civil claims.
• Costs of defending against unjustified claims.
• Protecting the personal assets of insured persons.

Typical cases where corporate liability comes into play include breaches of supervisory obligations, decisions made incorrectly or too late, failure to comply with laws and regulations, and incorrect valuations in mergers, acquisitions, or sales.

Benefits of Directors' and Officers' liability liability insurance

D&O liability insurance offers several advantages:

• Protection for the private assets of managers and boards of directors.
• Defence against lawsuits and assistance in legal disputes.
• Assumption of compensation payments and legal defence costs.
• Protecting the reputation of the company and its managers.

An important point that should be emphasized is that intentional breaches of duty or unlawful enrichment are typically not covered by this insurance. In addition, property and personal damage caused by the actions of managers are generally not covered by D&O insurance. Find specific offers from D&O insurance companies from AXA here and the Alliance here.

Buildings liability insurance

Building liability protects against damage that can be attributed to your building or land. Imagine that the driveway to your office freezes over in winter and a visitor slips. This is where this insurance comes in.

Business interruption insurance

Business interruption insurance in Switzerland is an important part of risk management for companies to protect themselves against financial losses due to unforeseen business interruptions. A fire in your production hall could bring your business to a temporary standstill. Business interruption insurance covers such cases and ensures the financial stability of your company.

Various insurance companies offer individual solutions that are tailored to the needs of different types of companies. The leading providers of business interruption insurance in Switzerland include Generali, Mobiliar, AXA and Vaudoise.

Legal protection insurance

Companies are often involved in legal disputes. Legal expenses insurance protects against the costs of legal disputes, whether with suppliers, customers or competitors.

When does legal expenses insurance come into effect?

Example scenario: Your company has developed innovative software for financial management. Once launched, your company receives a lawsuit from a competitor who alleges that certain elements of your software infringe the copyright of its own financial software.

Problem statement: Your company is facing serious legal challenges. It must not only examine the competitor's copyright claims, but also defend its own position to ensure the continued existence of the product and the company.

How legal expenses insurance helps

Legal advice: Insurance provides access to specialized lawyers in the area of copyright law who can advise your company in this complex area of law.

Assumption of costs: Insurance covers legal defence costs, including attorneys' fees, court costs, and any compensation claims that may arise in the event of a defeat.

Litigation: If the case goes to court, the insurance company will assist your company in the process, from preparing the defence to representing you in court.

In such a scenario, legal expenses insurance can make the difference between a successful defence and a potentially business-damaging defeat. The financial burden of litigation can be significant, and without insurance, your company could be forced to raise large sums of money for legal disputes. With legal expenses insurance, you can concentrate on your core business while at the same time protecting you from the risks and costs associated with legal disputes.

Mandatory social insurance in Switzerland: A must for every company

In Switzerland, companies are required by law to take out certain social insurance policies for their employees. These form the basis of the social network and offer basic protection for workers in various walks of life. In this section, we will explain the main mandatory social insurance that every company in Switzerland must have for its employees.

1. Old-age and survivors' insurance (AHV)

Die AHV is the most important pillar of retirement provision in Switzerland. It aims to secure the livelihoods of pensioners. Every employer is required to report its employees to AHV and pay contributions. The contributions are paid equally by the employer and the employee.

2. Disability insurance (IV)

The IV provides support for people who are unable to work due to disability or illness. It includes rehabilitation measures and financial benefits. As with AHV, contributions to IV are paid equally by employers and employees.

3. Purchase Compensation Code (EO)

The EO makes compensation payments for loss of earnings during military, civil defence or civilian service as well as in the event of maternity. Contributions to EO must also be paid jointly by employers and employees.

4. Accident insurance (UVG)

Every employer is required to insure its employees against occupational and non-occupational accidents. Occupational accident insurance is to be financed in full by the employer, while non-occupational accident insurance is usually covered by the employee. This insurance covers medical treatment costs and loss of income in the event of incapacity to work as a result of an accident.

5. Family Compensation Fund (FAK)

FAK provides family allowances such as child and education allowances. Employers are required to join a compensation fund and pay contributions that are financed exclusively by the employer.

6. Occupational pension plan (BVG)

The BVG, also known as the pension fund, supplements AHV/IV benefits and is mandatory for all employees who earn a minimum annual income of CHF 21,150. It covers the risks of old age, disability and death. Occupational pension contributions are financed jointly by employers and employees.

Compulsory social insurance in Switzerland is an essential obligation for companies to ensure the social and financial well-being of their employees. They help create a stable and safe working environment by providing basic coverage in the event of old age, disability, accident, illness and maternity. It is essential for every company to comply with these legal requirements and ensure that employees are adequately insured.

Specific insurance for limited liability companies and AGs in Switzerland

In Switzerland, insurance requirements are generally the same for limited liability companies and AGs. In particular, this includes daily sickness benefits and accident insurance, which ensures the protection of employees.

Additional relevant insurance

• Trust damage and credit insurance: These cover financial risks such as payment defaults and losses due to employee offenses.‍
• Property insurance: Protects moving objects such as machinery and inventory from damage caused by fire, water and theft.

Costs of business insurance

Insurance costs vary depending on company size, industry and risk profile. It is crucial to assess your company's specific risks and compare the offerings of different insurers. Insurance providers in Switzerland usually present a questionnaire on their websites, which must be answered in order to determine the insurance premium individually. This includes questions about sales figures, number of employees, whether domestic or international businesses are carried out, and more.

Personal anecdote

When I founded my own company in the IT sector, I initially underestimated the importance of business liability insurance. A minor error in software developed by us resulted in significant damage to a customer. Fortunately, insurance covered the damage, which saved us from a financial disaster. This experience taught me that adequate insurance coverage.

Conclusion and conclusion on insurance for Swiss companies

Choosing the right insurance for your company in Switzerland is a complex but crucial task. It's not just about meeting regulatory requirements, but also about protecting your business from unforeseeable events and ensuring long-term stability. While some insurance policies, such as business liability and accident insurance, are essential, you should also consider your company's specific risks and consider appropriate supplementary insurance.

Finally, I would like to give you some personal advice: Don't underestimate the importance of comprehensive insurance coverage. Well-thought-out insurance coverage can be the key to your company's long-term success and resilience. Remember to regularly review and adjust your insurance needs as both your company and market conditions are constantly evolving. With the right insurance strategy, you can successfully and safely manage your company in Switzerland.

This concludes the article, which aims to provide a deep understanding of the various insurance aspects for companies in Switzerland. This article takes into account both mandatory and additional types of insurance that are relevant for companies in various industries and sizes and underlines the importance of careful and adjusted insurance coverage.