Entrepreneur’s insurance cover

When planning your business activities, spare a few moments to think about insurance. This may seem somewhat boring, but it will provide everyday security for your business.

These instructions will take you through the key insurance policies for private traders.

What kinds of insurance does a private trader need?

There is no single right answer to this question — there are as many insurance needs as there are entrepreneurs. The key factor is your line of business: what kind of work do you do, what tools do you use, and what are the related liabilities.

For example, a consultant who mainly works with computers needs a different kind of insurance to a construction consultant who uses heavy machinery.

Many insurance policies for entrepreneurs are optional (in a similar way to insurance for consumers). They are not compulsory but prove their worth if an accident happens.

The following table lists the types of insurance available.

Entrepreneur’s insurance cover	Statutory	Optional
Self-employed persons’ pension insurance (YEL)	Yes
Accident insurance		Yes
Life insurance and disability insurance		Yes
Medical expenses insurance		Yes
Insurance cover for movable property, tools and equipment		Yes
Business interruption insurance		Yes
Liability and legal expenses insurance		Yes
Motor liability insurance	Yes, if the business involves vehicles
Insurance for employees	Yes, if the business has employees

Are insurance expenses tax deductible?

In most cases, yes. As a rule of thumb, expenses that are clearly related to business activities can be entered as business expenses and deducted for tax purposes. YEL pension insurance, which is the largest expense item for many entrepreneurs, is fully tax deductible.

You can use the bookkeeping service included in OP Light Entrepreneur to ensure that, say, insurance bills are fully tax-deducted.

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Statutory insurance for private traders

There are few statutory insurance policies for entrepreneurs in general. However, this depends on your line of business: for example, physiotherapists or masseurs may need statutory patient insurance. Check the insurance needs of your sector!

Below are the most common types of insurance for entrepreneurs.

Statutory self-employed persons’ pension insurance (YEL insurance)

Statutory YEL pension insurance is the cornerstone of social and pension cover for entrepreneurs. YEL pension insurance is statutory for all entrepreneurs who fulfil the following criteria:

• The entrepreneur is 18—67 years old
• Their earned income from business activities is at least 9 010,28 euros per year (limit for 2024)
• Their business activities continue for at least four months.

YEL pension insurance also covers entrepreneurs engaged in side work, if the above criteria are fulfilled. An entrepreneur must take out YEL pension insurance at least six months before starting as a private trader.

The size of the YEL premium is based on YEL income, which is defined by the entrepreneur. In a nutshell, YEL income is the value of the entrepreneur’s work input — for example, the amount they would have to pay another person to do the same work. Many entrepreneurs also base their social benefits on YEL income.

If you are a new entrepreneur, you will receive a large reduction on early-stage payments.

Read more about YEL pension insurance and applying for it in our article on YEL.

For farmers, the pension insurance equivalent to YEL insurance is known as farmers’ pension insurance (MyEL). You can read more about such insurance on the website of the Farmers' Social Insurance Institution of Finland.

With the bookkeeping service included in OP Light Entrepreneur, you can watch your business grow and identify the point at which taking out YEL pension insurance becomes relevant for you.

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Statutory motor liability insurance

If you use vehicles for business purposes, you must at least have standard motor liability insurance for them. Of course, you can complement statutory insurance with other insurance policies, such as comprehensive motor vehicle insurance.

We recommend that you discuss the use of vehicles for business purposes with your insurance company. You should inform the insurance company of matters such as how cars are used in the business. This could affect what the insurance covers.

Employees’ insurance, TyEL statutory employment pension insurance and unemployment insurance

Light entrepreneurs rarely hire employees when starting out, but you may hire someone while operating as a private trader. For example, at some point you may need an assistant, or a substitute during your summer holiday.

If you have paid employees, you must have insurance cover for them, such as statutory employment pension insurance (TyEL), unemployment insurance, statutory worker’s compensation insurance and employees’ group life insurance.

Voluntary insurance for private traders

Most insurance policies for entrepreneurs and businesses are voluntary. When considering insurance, take account of your business sector and the risks it involves.

The coverage and price should be on the right scale for your business: if your business is very small-scale, an extensive insurance package may not be necessary.

Below are some of the more common types of voluntary insurance policies.

Self-employed persons’ accident insurance

Even if your work is not particularly risky, anyone can have an accident or mishap due to which they temporarily lose the ability to work. For entrepreneurs, it is important to recover work ability as soon as possible — you may want the best treatment without unnecessary delays.

With accident insurance, an entrepreneur can secure higher income in the event of incapacity for work and speed up their return to work.

Accident insurance can cover matters such as the following:

• Medical treatment expenses
• Rehabilitation costs
• Permanent disability
• Loss of income due to disability

The price of accident insurance may depend on its coverage (working hours/leisure time), the danger involved in the work, and annual earnings.

Medical expenses insurance

Medical expenses insurance can be taken out to complement self-employed persons’ accident insurance. It compensates for minor medical treatment expenses such as a visit to a private doctor or hospital.

Business interruption insurance

Business interruption insurance covers financial losses due to sudden interruptions to business. These can include the breakage of vital equipment or other property, or damage to the place of business.

Items such as extra expenses or lost sales are not covered.

Legal expenses insurance

Legal expenses insurance will cover possible expenses, such as lawyer’s fees, associated with legal action and civil cases. Reassess your risks on the basis of your business: if you need to make several important agreements, such as renting premises or equipment, legal expenses insurance could be a good investment.

Please note that, when included in home insurance, some legal expenses insurance for private persons does not include legal expenses insurance for entrepreneurs and companies. Check the matter with your own insurance company.

Insurance cover for movable property, tools and equipment

Property insurance covers damage to machinery, equipment, inventory, buildings and other types of property.

Payment of compensation depends on precisely what the insurance covers.

Typical accidents include vandalism, fire, breakage, burglary or theft, and some natural phenomena such as storms.

General liability insurance for light entrepreneurs

General liability insurance provides financial security if, by its actions, your company or, for example, a faulty product causes damage to another party. Such damage can affect either people or property.

What kind of general liability insurance would be suitable for you? This depends on your line of business. Weigh up the possible risks posed to your products or services and discuss them with your insurance company.

FAQ about insurance

We gathered some frequently asked questions about insurance here. Be aware that insurance terms and conditions can be individual and vary between insurance companies. Make sure that you discuss your needs and the insurance’s coverage with your insurance company.

Does home insurance cover my company’s property?

Your home insurance may cover property used by the company — insurance policies can vary, so check this with your insurance company. Many light entrepreneurs work from home at least some of the time and movable property — such as computers, phones and other equipment — may be covered by normal home insurance. Check this with your insurance company.

Should I shop around for insurance policies?

Many insurance companies offer a range of insurance packages to entrepreneurs. You can contact several companies and compare their packages, to see which would be best for you.

Price is certainly a factor, but not necessarily the only one. The contents of the insurance are the key issue: the package which best supports your business is the one to choose.

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Read more about insurance on op.fi.

The easy and fast way to become an entrepreneur

OP Light Entrepreneur is a fast way of getting started as an entrepreneur — in just a few minutes online. We can also help you to find just the right insurance. In the future, you will be able to take out insurance directly with us.

We will automatically handle your bookkeeping for you as an OP Light Entrepreneur. Bills you send will be entered directly in bookkeeping and expenses automatically deducted for taxation purposes. When your customer has paid the bill, we will handle tax prepayments, VAT, possible pension insurance and other statutory payments on your behalf.

If you need help, our expert customer service is available via chat on our website. OP Light Entrepreneurs can also phone us on our helpline — log into the service to see our contact information.

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