The cost of professional indemnity insurance (BAV) depends on countless factors. Insurers often say that they offer BAV insurance from as little as €20 or €30 a month. That sounds nice, but in fact such amounts mean nothing. To understand why, it helps to know what insurers take into account. This page describes the situation in the Netherlands.
Costs based on specific professional groups
BAV insurance is always tailored to specific professional groups. For each professional group, an insurer can estimate more or less how big the risk of a claim is and how high such claims can be. Some professions are of course a lot riskier than others. A mistake made by a lawyer or an engineer can result in much more damage than a mistake made by a copywriter. Naturally, a copywriter will therefore have to pay a lower premium, which is only fair.
Other factors that determine the risk
Of course, the profession practised is not the only factor. A lawyer who works for companies worth millions will cause a lot of damage with a mistake more quickly than a lawyer who mainly resolves disputes between neighbours. The insurer often collects a great deal of data to calculate the premium. Examples are:
- The relevant experience of the directors
- The relevant education of the directors
- The number of employees in the business
- The type of clients the business has
- The annual turnover of the business
- And so on
Sum insured
The sum insured is always limited to a maximum amount per year. The higher this amount, the higher the premium will be. These amounts often range from €250,000 to €1,000,000. With some insurers you can also adjust this amount yourself, so that you have suitable cover while also keeping the premium down.
Excess
The excess is usually between €250 and €1,000, but with some insurers it can be raised considerably. Claims are by no means always worth millions, and general terms and conditions can already offer some protection, so an excess like this can weigh heavily in percentage terms on small claims. The insurer of course likes this, and that in turn results in a lower premium. On the other hand, not every self-employed professional (zzp'er) can simply do without €1,000. So work out for yourself which excess is right for you, and request several quotes if needed.
Discounts and benefits
Just like private individuals, business policyholders can be entitled to discounts. For start-ups in particular, there are sometimes attractive promotions in which an insurer offers benefits. For example, we found promotions in which policyholders received BAV insurance free of charge for six months. The insurer's aim is of course to attract a new, loyal customer, but it is still possible to cancel the insurance and switch.
Comparing professional indemnity insurance
Anyone who requests several quotes will notice that there can still be large price differences. That is because each insurer calculates things differently. They sometimes use different data and therefore estimate the risk, and so the premium, differently. As a result, it is quite possible that one insurer has the cheapest premium for a civil-law notary and another insurer has the cheapest premium for a project manager. Requesting several quotes and comparing everything carefully is therefore recommended.
More information about comparing BAV insuranceRead also: Saving money on professional indemnity insurance.
Frequently asked questions about BAV insurance
Do I still need personal liability insurance in addition to my BAV insurance?
Yes. They are two separate policies that are not connected to each other. Personal liability insurance (AVP) does not cover professional liability, and the reverse is also true.
Are there acceptance criteria for BAV insurance?
Yes. In principle, insurers only insure target groups they know and whose risk they can estimate well. They also require the directors to be able to show relevant experience and/or education. Things like annual turnover or dependence on a small number of clients for turnover can also play a role.
Does BAV insurance also cover damage caused by employees?
Yes. BAV insurance covers liability for financial loss that others have suffered as a result of mistakes made by employees in the course of their work. An example is an employee who gives incorrect advice. Things like deception and fraud are logically excluded.
What is prior acts cover?
Some BAV policies offer prior acts cover (inloopdekking). With this cover, the insurer also covers claims that are submitted during the term of the insurance but originated earlier. Conditions do of course apply.
Does BAV insurance also cover administrative payment errors?
Most insurers are not very willing to insure administrative payment errors. Some insurers do, but with a lower sub-limit per claim.