The entrepreneur is the most important resource

There are a number of expert organizations working in collaboration with the Vaasa region enterprise agency, offering their services and expertise for new entrepreneurs.

– We have an active cooperation with these organizations, says Startias director Tommi Virkama. – Together with them we organize for example information events and if the beginning entrepreneur wishes, we send his or her contact information to the organizations so that they may take contact and offer their services directly.

We present these expert organizations in a new article series Expert knows, in which experts are given a chance to tell their advice for beginning entrepreneurs. We start with the insurance experts: If Vahinkovakuutusyhtiö Oy, LähiTapiola and Fennia.

The entrepreneur is the most important resource

For a new entrepreneur, insurances can be a jungle to get through. When working for someone else, you do not need to think about any work-related insurances, but if you have a business of your own, you do have to find out what is needed and make the decisions. For example, an entrepreneur is responsible for financing his or her pension. Self-Employed Persons’ Pension Act (YEL) states that all self-employed people in Finland must take a YEL insurance and that the entrepreneur’s income will be based on a earned income which the entrepreneur defines.

– But it is by no means enough that you have the YEL only, says Teemu Lillrank, Staff Risks Expert at Lähitapiola, Jouni Nurminen, Customer Manager at Fennia and Sanna Tiesmaa, Sales manager at If.
– Even though there still are entrepreneurs who think they can manage with just the security given by the YEL, it is simply not enough in case something happens.

A few years back, an entrepreneur was not seen as a valuable resource and the importance of insuring persons was not great, as equipment and vehicles were considered more significant. But during the past few years a change has come along and the media has played a role in it.

Sanna Tiesmaa at If and Teemu Lillrank at Lähitapiola tell their
customers how important it is for entrepreneurs to insure themselves.

– The daily Iltasanomat published a few years ago a chart on what you leave with when you count everything together, and it was a wake-up call for a lot of entrepreneurs, recalls Tiesmaa.
– When customers get to see concrete figures and examples, they tend to grasp things better, says Lillrank noddingly.

Partnership agreement most important of all

There are ways of securing yourself against even the most unfortunate happenings. When planning for insurance coverage, an entrepreneur needs to think in advance who will be the beneficiary of a life insurance – the entrepreneur’s family or the business? And is there a way to prepare oneself for a situation is which a joint owner dies and his or her shares are passed to the death estate, which may not necessarily have any interest in the business?

– It pays to agree on everything in the partnership agreement: it is THE document, reminds Nurminen. – In it you can for example define if your enterprise may redeem shares from the death estate. The redeeming is possible for example using the indemnity amount in the life insurance that Fennia offers.

There are also large risks if an entrepreneur becomes incapable for work: How much money can the entrepreneur get? Not only do the family’s living, debts, housing and other expenses need to considered but also how the business is going to continue? Who manages the business possessions of a joint owner who is incapable of working and what will happen to the possessions?

– These are very sensitive and personal matters we are talking about, such as the entrepreneur’s state of health, which you don’t discuss with just anyone, describes Lillrank. – Our job is to tell the customers what the choices are and go through the risks. It is the customer who makes the decisions.

Fennia's Jouni Nurminen reminds entrepreneurs of the importance of a partnership agreement.

Even divorcing is a risk for an entrepreneur in many senses.
– When a distribution of matrimonial assets is done, the business’ possessions will also be summed in this if the spouses don’t have a marriage settlement, Nurminen adds. – Adjustment can be paid in cash and if there is no money, the joint owner’s part of the business possessions is liable to be transferred to the ex-spouse. This cannot, however, be arranged with help from any insurance but needs to be predicted by taking into account the possessions in the marriage settlement and in the partnership agreement.

Comparing pays off

Apart from life and invalidity insurances you can get your business coverage for property risks, civil liability, legal expenses and motor vehicles.  A coverage for business interruption gives you a possibility to get benefits in case your business activities are interrupted due to damage to possessions or property. And if your business is dependent on another, you might want to consider an insurance that covers for any disturbances in your subcontractor relationship.

New entrepreneurs compare often what different insurance companies have to offer. Tiesmaa says that business customers are well aware of different coverages and often ask offers.

- It is very common that customers keep their insurances in two, even three insurance companies, says Lilllrank.
- But it is good to keep in mind that minimum sums of own risk will not make you happy, Tiesmaa adds. – Sometimes I need to constantly remind the customer of how the amount of own risk affects annual fees. In general, large sums usually scare off new entrepreneurs. But I do often see an “Aha!” when I divide the annual payment in monthly rates, which shows concretely how much you are prepared to invest in yourself per month.

For a new entrepreneur it pays off to contact insurance companies at an early stage of planning. And as Tiesmaa sums it up: - You really have to put yourself in the first place, as none of us is immortal.  

Startia’s expert organizations
(in Swedish)