Insurances

How to insure your business in France

It’s essential that your business is properly insured. This article covers the compulsory insurances for various types of business, and also looks at other insurances relevant to businesses and the self-employed.

Insurances

Insurers have networks of branch offices in every town, and arranging insurance is easier face to face than by telephone, even if your French is fluent. You can also arrange insurance over the internet. Many insurers offer ‘multi-risk’ ( multirisques) policies aimed at various types of business (e.g. shops, restaurants) which cover all the relevant risks. Insurance premiums are generally reasonable, but, as always, it pays to shop around.

In order to establish the insurance your business needs, take an ‘inventory’ of the risks to which it’s exposed, which usually fall into the following categories:

  • Loss of or damage to physical possessions (e.g. fire, breakage or theft)
  • Liability due to the responsibilities of the business for its activities (e.g. products sold or work done by the business);
  • Risks related to employees (e.g. illness, accidents and death);
  • Bankruptcy or other cessation of business.

Then evaluate each type of risk for all possible financial consequences and not only ensure that you’re insured against them, but also set up policies within the company to prevent losses or limit damage.

Premises

If you operate business premises, you should insure both the building and its contents, although neither is obligatory. It’s preferable to choose a multi-risk policy that also covers injury or damage to property sustained by third parties whilst on your premises. Premises insurance is known as assurance des locaux. If you work from home, make sure your household insurer is notified and that the policy has sufficient cover for your computers, etc. Often the same company or insurance agent who handles your home insurance can offer premises cover for your business, whether or not it’s located in your home.

Public Liability

Everyone living in France must be insured for public liability ( responsabilité civile). This is often included in household insurance policies, but if you’re running a business from home, you must insure your business activity separately, as business activities aren’t covered by personal policies.

Director’s Liability

The managing director of most companies is responsible for any breaches of corporate responsibility and can have his personal assets seized even if his business is a limited liability company. This, of course, is also the case in an unlimited liability business. A policy covering responsabilité personnelle du dirigeant (director’s personal responsibility) protects you from ruin if you’re sued personally for mistakes made by your company or business or if it doesn’t fulfil its legal obligations in any way.

Car Insurance

Make sure your car insurance covers business use if you will be using your car for business purposes and that you have separate cover for any vehicles owned by the business. Basic car insurance is, of course, compulsory.

Other Insurance

Other compulsory insurance includes a ten-year guarantee ( garantie décennale) on all building work for companies involved in construction or renovation.

Optional insurance includes the following:

  • Policies called assurance de matériel professionnel are available to cover tools and machinery.
  • Assurance perte d’exploitation covers your business if you’re prevented from operating, for example by a fire or an equipment breakdown. It will pay your employees’ salaries and other fixed costs.
  • Protection juridique covers legal costs.
  • Although your social security contributions cover you for treatment in the case of illness or accident, they won’t normally compensate you for loss of earnings resulting from these. There are various policies that will do so; any insurance broker will be pleased to explain the options to you. You may also wish to take out life assurance or insurance.

Insurers have networks of branch offices in every town, and arranging insurance is easier face to face than by telephone, even if your French is fluent. You can also arrange insurance over the internet. Many insurers offer ‘multi-risk’ ( multirisques) policies aimed at various types of business (e.g. shops, restaurants) which cover all the relevant risks. Insurance premiums are generally reasonable, but, as always, it pays to shop around.

In order to establish the insurance your business needs, take an ‘inventory’ of the risks to which it’s exposed, which usually fall into the following categories:

  • Loss of or damage to physical possessions (e.g. fire, breakage or theft)
  • Liability due to the responsibilities of the business for its activities (e.g. products sold or work done by the business);
  • Risks related to employees (e.g. illness, accidents and death);
  • Bankruptcy or other cessation of business.

Then evaluate each type of risk for all possible financial consequences and not only ensure that you’re insured against them, but also set up policies within the company to prevent losses or limit damage.

Premises

If you operate business premises, you should insure both the building and its contents, although neither is obligatory. It’s preferable to choose a multi-risk policy that also covers injury or damage to property sustained by third parties whilst on your premises. Premises insurance is known as assurance des locaux. If you work from home, make sure your household insurer is notified and that the policy has sufficient cover for your computers, etc. Often the same company or insurance agent who handles your home insurance can offer premises cover for your business, whether or not it’s located in your home.

Public Liability

Everyone living in France must be insured for public liability ( responsabilité civile). This is often included in household insurance policies, but if you’re running a business from home, you must insure your business activity separately, as business activities aren’t covered by personal policies.

Director’s Liability

The managing director of most companies is responsible for any breaches of corporate responsibility and can have his personal assets seized even if his business is a limited liability company. This, of course, is also the case in an unlimited liability business. A policy covering responsabilité personnelle du dirigeant (director’s personal responsibility) protects you from ruin if you’re sued personally for mistakes made by your company or business or if it doesn’t fulfil its legal obligations in any way.

Car Insurance

Make sure your car insurance covers business use if you will be using your car for business purposes and that you have separate cover for any vehicles owned by the business. Basic car insurance is, of course, compulsory.

Other Insurance

Other compulsory insurance includes a ten-year guarantee ( garantie décennale) on all building work for companies involved in construction or renovation.

Optional insurance includes the following:

  • Policies called assurance de matériel professionnel are available to cover tools and machinery.
  • Assurance perte d’exploitation covers your business if you’re prevented from operating, for example by a fire or an equipment breakdown. It will pay your employees’ salaries and other fixed costs.
  • Protection juridique covers legal costs.
  • Although your social security contributions cover you for treatment in the case of illness or accident, they won’t normally compensate you for loss of earnings resulting from these. There are various policies that will do so; any insurance broker will be pleased to explain the options to you. You may also wish to take out life assurance or insurance.

This article is an extract from Making a living in France.
Click here to get a copy now.

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