Layer 1: your legal form

Your legal structure is your first line of defence. As a sole trader or VOF partner, you are personally liable; a business debt is your private debt. As a BV (besloten vennootschap, the Dutch private limited company), your liability is in principle limited to the company, protecting your personal assets, which is a major reason to choose a BV for higher-risk activities.

Layer 2: professional liability (BAV)

"Beroepsaansprakelijkheid" covers financial loss caused by mistakes in your professional work or advice. If you are a consultant, designer, advisor or developer and your error costs a client money, this insurance steps in. Essential for advice-based work.

Layer 3: general liability (AVB)

"Bedrijfsaansprakelijkheid" covers physical damage or injury you cause to people or property during your work, for example damaging a client's premises. Important for anyone working on-site or with physical goods.

Director liability: where the BV stops

A common misunderstanding: a BV stops short of making you untouchable. If you act improperly as a director ("onbehoorlijk bestuur"), pay dividends beyond the company's means, or give personal guarantees, you can still be held personally liable. The BV shields you from ordinary business risk rather than your own wrongdoing.

How to build your protection

  1. Choose a legal form that matches your risk (BV for higher-risk work).
  2. Add professional liability insurance if you give advice or do creative work.
  3. Add general liability insurance if you work on-site or with physical products.
  4. Act properly as a director and avoid personal guarantees where possible.
Tip: some clients require proof of liability insurance before they will hire you. Having it in place can win you work as well as protect you.

What comes after this

This question continues in Your First 30 Days as an Entrepreneur, Building a Financial Buffer as an Entrepreneur and What to Do When a Client Pays Late in the Netherlands.