Overview of Mandatory and Voluntary Insurances for New Business Founders

Starting a business involves not only strategic and organizational tasks, but also the question: Which insurances are legally required – and which are voluntary but strongly recommended?

‍

Mandatory Insurances

Whether an insurance is mandatory depends mainly on whether employees are hired, the industry in which the business operates, and the chosen legal form.

OASI/DI/IPG – Social Security Contributions

(obligatory for all businesses with employees)

All businesses – whether a sole proprietorship, limited liability company (GmbH/Sàrl), or corporation (AG/SA) – must register their employees with the OASI/DI/IPG scheme (Old Age and Survivors’ Insurance / Disability Insurance / Income Compensation Allowance) and pay contributions.

Sole proprietors without employees must also register with the cantonal compensation office as self-employed.

Accident Insurance Law (AIA / UVG)

(mandatory for employees)

Businesses employing staff must insure them against occupational and non-occupational accidents:

• Occupational accidents (OA): mandatory for all employees
• Non-occupational accidents (NOA): mandatory if an employee works at least 8 hours per week

Self-employed individuals must also arrange AIA/UVG coverage.

Occupational Benefits Insurance (LPP/BVG)

(mandatory above a certain salary threshold)

Employees must be covered if:

• they are over 18 years old and
• earn an annual salary exceeding CHF 22,050 (as of 2024)

The employer must select a pension fund and cover at least 50% of the contribution amount.

For self-employed persons, LPP/BVG is voluntary; alternatively, higher contributions to the pillar 3a private pension scheme are possible.

Daily Sickness Allowance Insurance (KTG)

KTG is not legally mandatory; however, many companies choose it because:

• employers are required by Swiss Code of Obligations Art. 324a to continue salary payments in case of illness,
• KTG reduces the financial risk for the company.

In some collective labor agreements (CLA/GAV), KTG is mandatory.

Mandatory Operational or Industry-Specific Insurances

Depending on the activity, additional mandatory insurances may apply. Examples:

• Construction and installation businesses: compulsory SUVA coverage
• Companies operating motor vehicles: compulsory motor vehicle liability insurance
• Regulated professions (e.g., financial intermediaries, trustees): specific professional liability insurance

It is advisable to verify sector-specific requirements with cantonal and federal authorities.

‍

Voluntary but Strongly Recommended Insurances

While not legally required, these insurances protect against significant financial risks – especially in the early phase of a business.

Business Liability Insurance

Covers personal injury and property damage caused by the company.

Recommended for: almost all businesses – especially craft/trade, hospitality, service and manufacturing sectors.

Professional Liability Insurance

Essential protection for:

• Consultants
• Architects
• Engineers
• IT service providers
• Trustees and auditors

It protects against financial losses resulting from errors or omissions.

Legal Protection Insurance

Covers costs for lawyers, court cases, and legal disputes.

Important for young companies, as even minor conflicts (e.g., rental matters, customer claims) can become costly.

Inventory / Property Insurance

Covers damage to business equipment, machines, goods, and IT systems.

Optional modules include fire, water, theft, glass breakage, and natural hazards.

Cyber Insurance

Increasingly relevant – it covers:

• Data breaches
• Cyberattacks
• System outages
• Forensic and recovery costs

Particularly recommended for companies processing personal data.

Business Interruption Insurance

Protects against loss of revenue caused by business downtime – e.g., after fire, cyberattack, or technical failures.

‍

Conclusion

Insurance protection for new businesses in Switzerland consists of a mix of statutory obligations and voluntary, yet business-critical coverage.

While OASI/DI/IPG, AIA/UVG and LPP/BVG must always be ensured when hiring employees, voluntary insurances such as business liability, cyber, or legal protection can safeguard the company against financial risks that may threaten its survival during the founding stage.

A thorough individual risk assessment is therefore an essential step in every business formation.

‍