How to limit the impact of incapacity for work

If you fall ill or have an accident as an entrepreneur, you run the risk of not being able to work and not having an income. You can limit the consequences with insurance and a living will.

You can cover the loss of income due to incapacity for work with disability insurance. You use a living will to minimise legal consequences.

Coping with loss of income

If you become ill or disabled, you may become incapacitated for work. You may then be unable to do some or all of your work, temporarily or permanently.

If you take out insurance, you will still have income if you are unfit for work. This insurance often has a risk period of, say, one month. After one month, the insurance will start paying. If you have the flu for a week, for example, you will not receive any compensation.

You can insure yourself in different ways. You can take out disability insurance (AOV) with a private insurer or an interest or professional organisation. You can also take out insurance with the UWV (Employee Insurance Agency). You can also join a group of entrepreneurs who help each other in case of incapacity for work, such as in a donation circle or with crowdsurance.

Not all entrepreneurs opt for disability insurance. The costs play a role in this. You pay an average of 200 to 300 euros a month for an AOV. The amount of the premium depends on profession, age and insured amount, among other things. A construction worker, for instance, runs more risk than an accountant and will spend more money on insurance.

Limiting legal consequences

By drawing up a living will (called a levenstestament in Dutch), you can limit the legal consequences of incapacity for work. The person you choose and authorise makes decisions for your business if you are unable to do so yourself. Such a situation may arise, for example, due to brain damage.

In a living will, for example, you lay down in advance who will order new supplies on your behalf, pay your employees' salaries and file VAT returns. If you do not do this, your colleagues will have to go to court to arrange such matters. That often takes months. In the meantime, your business is at a standstill, which can have major consequences.  

A living will usually consists of 2 parts. A power of attorney for financial interests and a power of attorney for medical and personal matters. You draw up such a will together with a civil-law notary. If you have a bv, you cannot always appoint an authorised person for your business. You can only do so if you own all the shares in your business.

No arrangements

Have you made no arrangements and do you become ill? Then there is a risk that you will have to use up your equity capital before you are entitled to a benefit. Even if your partner has an income, you often cannot claim benefits.

If (like your partner) you have no income and no assets, you may be entitled to benefits such as social assistance (bijstand), IOAZ or WW. However, these benefits are subject to conditions.

If you do not have a living will and are no longer able to make decisions, someone else will have to arrange things for you. Someone close to you, like your partner or a colleague, can apply to the subdistrict court to appoint them or another person as administrator or curator.

Adjusting the registration with KVK

Because you have become unfit for work, you may need to adjust your business's registration in the KVK Business Register. As every situation is different, it is best to contact us about this.