Business insurance glossary: Danish concepts explained

This glossary explains the key concepts in Danish business insurance, so you can read a quote, a policy or a set of terms and understand what you are actually buying. Each entry gives the Danish term as well, so you can match it to the wording in your own documents. The glossary is written for businesses operating in Denmark, so the examples and the rules reflect how insurance works here.

How to use the glossary

You can use this for a quick lookup or read it through. Start with the coverage families for a broad picture of what policies typically protect. Go straight to an individual entry when a particular word in a quote or policy is giving you trouble. The labels tell you whether a given cover is required by law or simply recommended.

Coverage families

Most types of coverage fall into five groups. When you come across a term, ask which family it belongs to. That tells you which part of the business it protects.

Liability. Claims from third parties where your business causes harm. Example: a customer trips over a cable in your shop.

Property and assets. What the business owns or uses. Example: fire or theft affecting tools and stock.

Cyber and data. Digital incidents such as hacking and data leaks. Example: your webshop is taken down by a ransomware attack.

Employees. Cover for staff against work-related injury. Example: an employee suffers a back injury while lifting.

Earnings. Lost revenue when operations have to stop. Example: revenue lost while the workshop is rebuilt after a fire.

Required by law, or recommended

In Denmark, only a handful of business insurances are required by law. The rest are optional in legal terms, but often required under contracts, tenders or leases.

• Statutory work injury insurance (arbejdsskadeforsikring) is required from your first employee.

• Motor third-party liability insurance (motoransvarsforsikring) is required for registered vehicles used on public roads.

• Professional indemnity insurance (professionel ansvarsforsikring) is required in certain regulated professions, including parts of healthcare and advisory work.

• Public liability, business interruption, cyber and others are not required by law, but are frequently required in contracts and tenders.

Glossary A to Z

Jump to a term:

A All-risks · Actual cash value

B Building insurance · Business interruption insurance

C Claim notification · Commercial contents insurance · Comprehensive motor cover · Custody cover · Cyber insurance

D Data breach · Deductible · Directors and officers liability (D&O)

E Exclusions

G Gross negligence

H Health insurance (business)

I Insurance terms and conditions

L Legal expenses insurance · Limitation of liability

M Machinery breakdown insurance · Motor third-party liability insurance

N Notice period

O Occupational disease · Overinsurance

P Policy · Premium · Price walking · Product liability insurance · Professional indemnity insurance · Public liability insurance

R Renewal date · Replacement value · Risk profile

S Statutory work injury insurance · Subcontractor liability · Subrogation · Sum insured · Supplier business interruption

U Underinsurance

W Workplace accident

All-risks (all-risk)

All-risks is a form of coverage where everything is covered unless it is explicitly listed as an exclusion. It gives broader protection than a standard policy, which covers only the types of loss it names. Read the exclusions, because they are what define an all-risks policy.

Actual cash value (dagsværdi)

Actual cash value is what an item is worth after deducting for age and wear. If the policy settles at actual cash value, you are paid what the item was worth when the loss happened, not the price of a new one. The alternative is replacement value.

Building insurance (bygningsforsikring)

Building insurance covers damage to the building itself, for instance after a fire, a storm or certain kinds of water damage. It is relevant if your business owns its premises. If you rent, the landlord normally insures the building while you insure your own contents.

Business interruption insurance (driftstabsforsikring)

Recommended. Business interruption insurance covers lost earnings and additional costs when a covered event stops your operations. It normally requires another covered loss first, usually property damage under your contents or building insurance. If your workshop burns down, business interruption coverage can keep the revenue coming while it is rebuilt. Without an underlying loss, it rarely pays out.

Claim notification (skadeanmeldelse)

A claim notification is what you send the insurer once a loss has occurred. It opens the claim and should be sent quickly, since late notification can affect your coverage. Describe the event specifically and keep documentation such as photographs and receipts.

Commercial contents insurance (erhvervsløsøreforsikring)

Commercial contents insurance covers the business's fixtures, equipment and stock, including furniture, computers, machinery and tools, against risks such as fire, theft and certain water damage. It can stand alone or form part of a packaged business insurance policy. Sums insured and exclusions depend on the policy.

Comprehensive motor cover, business (kaskoforsikring, erhverv)

Recommended. Comprehensive motor cover protects the business's own vehicles, including damage you cause yourself. It sits on top of the statutory motor third-party liability insurance, which only covers damage to others. If you run a company car or a van, this is the part that pays for your own vehicle after an accident.

Custody cover (varetægtsforsikring)

Recommended. Custody cover protects items a customer has handed over to you while they are in your care. A standard public liability policy often will not cover this. If a garage drops a customer's car off the lift, or an IT repairer damages a computer brought in for service, this is where the coverage sits.

Cyber insurance (cyberforsikring)

Recommended. Cyber insurance covers selected costs arising from digital incidents such as data leaks, hacking, ransomware and email fraud. If your webshop is hit by ransomware, the policy can help with technical recovery, notifying customers and certain legal costs. It does not replace good IT security, and most insurers expect basic controls such as backups and access management.

Data breach (databrud)

A data breach is a security failure that leads to personal data being leaked, altered or lost. It can trigger a notification obligation under GDPR and is often covered by a cyber policy. An example is a hacker gaining access to your customer database.

Deductible (selvrisiko)

The deductible is the amount you pay on each claim before the insurer covers the rest. If the deductible is DKK 10,000 and the loss comes to DKK 30,000, you pay DKK 10,000 and the insurer pays the remaining DKK 20,000. A higher deductible usually means a lower premium. It also determines when reporting a claim is worth it at all.

Directors and officers liability insurance, D&O (bestyrelses- og ledelsesansvarsforsikring)

Recommended. D&O insurance covers the personal liability that directors and board members can incur for errors and omissions in running the company. The abbreviation stands for directors and officers. If a claim is brought against a director personally, for instance by investors or creditors, this is where the coverage sits. It becomes particularly relevant once you have external investors and a professional board.

Exclusions (undtagelser)

Exclusions are the situations and types of loss the policy does not cover. They are set out in the policy terms and matter just as much as the coverage itself. A cyber policy might, for example, exclude losses caused by a failure to patch systems. Read the exclusions before you rely on any coverage.

Gross negligence (grov uagtsomhed)

Gross negligence is a serious departure from ordinary care, beyond a simple mistake. Losses caused by gross negligence can lead to reduced compensation or a subrogation claim from the insurer. An example is leaving the premises unlocked with the alarm switched off.

Health insurance, business (sundhedsforsikring, erhverv)

Business health insurance gives employees fast access to diagnosis and treatment, such as physiotherapy, a psychologist or surgery at a private hospital. It belongs to the employee coverages and is voluntary. For many businesses it is about reducing sickness absence and holding on to key staff.

Insurance terms and conditions (forsikringsbetingelser)

The terms and conditions are the detailed rules of the policy: what is covered, what is excluded and what is required of you. They form part of the agreement alongside the policy document. This is where you find the exclusions that decide whether a loss is covered.

Legal expenses insurance (retshjælpsforsikring)

Legal expenses insurance covers costs such as legal fees and court fees if the business ends up in a dispute with a customer, a supplier or a landlord. It is often included in a business or building policy. Legal fees mount up quickly, so the coverage is worth knowing about before a dispute starts.

Limitation of liability (ansvarsfraskrivelse, risikoallokering)

A limitation of liability is a contractual clause that caps or shifts responsibility for a particular risk between two parties. Together with other forms of risk allocation in contracts, it is sometimes a more effective tool than insurance. An example is a supply agreement that expressly limits liability for consequential loss.

Machinery breakdown insurance (maskinforsikring)

Machinery breakdown insurance covers sudden, unforeseen damage and failure affecting key machinery and technical equipment. It does not cover ordinary wear or the consequences of poor maintenance. It matters most in manufacturing and workshops, where operations depend on individual machines. If a critical machine fails suddenly, the policy can cover repair or replacement. It is often sold as an optional extension.

Motor third-party liability insurance (motoransvarsforsikring)

Required by law. Motor third-party liability insurance must be in place for registered vehicles driven on public roads. It covers the damage the vehicle causes to others. If your business runs a van registered for commercial use, it needs liability coverage before it can be driven. Without it, a registered vehicle is generally not allowed on the road.

Notice period (opsigelsesvarsel)

The notice period is how much warning you have to give when cancelling a policy. Many business policies can be cancelled at short notice, often 30 days, but always check the policy. The notice period determines how quickly you can move coverage to another insurer.

Occupational disease (erhvervssygdom)

An occupational disease is an illness that develops as a result of work over time, as opposed to a sudden accident. An example is hearing loss after years in a noisy production environment. Occupational diseases are handled within the Danish work injury system and reported under the applicable rules. Whether a case is recognised is decided against criteria set in legislation.

Overinsurance (overforsikring)

Overinsurance is when your sum insured is set higher than the value of what you are insuring. You pay for coverage that can never be paid out, because compensation cannot exceed the actual loss. Review your sums so you are not paying for more than you can claim.

Policy (police)

The policy is the document setting out your insurance agreement: what is covered, your sums insured, your deductible and your premium. It goes together with the terms and conditions, which fill in the detail. Always read the policy before you sign.

Premium (præmie)

The premium is the price of your insurance, the amount you pay monthly or annually. It depends on factors including your industry, your turnover, the coverage you have chosen and your deductible. A higher deductible usually brings the premium down.

Price walking

Price walking is when an insurer raises the premium for existing customers step by step, so the most loyal end up paying the most. It happens because an arrangement is rarely renegotiated once it is in place. Testing the market at regular intervals is what counteracts it.

Product liability insurance (produktansvarsforsikring)

Recommended. Product liability insurance covers loss caused by products you manufacture, sell or distribute. It can respond if a defect leads to injury or property damage at a customer's premises. If you sell a faulty item that injures a consumer, this is where the coverage sits. It complements public liability insurance, which covers loss arising from what you do rather than from what you sell.

Professional indemnity insurance (professionel ansvarsforsikring, rådgiveransvar)

Required by law in certain professions. Professional indemnity insurance covers businesses selling advice, design or specialist work where a mistake causes the client a financial loss. Claims can arise from errors, omissions or inadequate advice. If you advise wrongly and the client loses money as a result, the policy can cover the claim. For some regulated professions, equivalent coverage is a legal requirement.

Public liability insurance (erhvervsansvarsforsikring)

Recommended. Public liability insurance covers third-party claims where your business causes injury or property damage through its activities. It is relevant when a customer falls in your shop, or when your equipment damages something at a client's site. It covers claims against you, not damage to your own property. Where the loss stems from a product you sold, product liability insurance applies instead.

Renewal date (hovedforfald)

The renewal date is the annual date on which the policy renews and the premium falls due. Many arrangements can be cancelled as at the renewal date without a fee, which makes it an important marker if you are thinking about changing insurer.

Replacement value (nyværdi)

Replacement value is what it costs to buy an equivalent new item. If the policy settles at replacement value, you can replace what you lost with no deduction for age or wear. Check the policy to see whether your contents are covered at replacement value or actual cash value.

Risk profile (risikoprofil)

Your risk profile is the overall picture of the risks your business is exposed to, based on your industry, activities, size, suppliers and geography. It determines which coverage and which sums make sense for your business specifically. Coverage that fits the profile avoids both underinsurance and overinsurance.

Statutory work injury insurance (arbejdsskadeforsikring)

Required by law. Statutory work injury insurance covers your employees if they are hurt at work or develop an occupational disease. The obligation starts with your first employee. Examples include a carpenter falling from scaffolding, or an office worker who develops a repetitive strain injury over time. The Danish scheme covers both workplace accidents and occupational disease, which is why it does not map neatly onto employers' liability insurance in other countries.

Subcontractor liability (underleverandøransvar)

Subcontractor liability is the liability your business can pick up for mistakes made by your subcontractors. If you use subcontractors, a claim can land with you even though the work was not yours. It is a systematically overlooked gap that neither standard policies nor contracts always close.

Subrogation (regres, regreskrav)

Subrogation is when the insurer pays your claim and then pursues the amount from whoever was actually at fault. An example is a supplier whose error caused the loss. Subrogation does not change your coverage, but it decides who ends up paying.

Sum insured (forsikringssum, dækningssum)

The sum insured is the most the policy will pay for a covered claim, usually per claim or per year. With a sum insured of DKK 5 million and a claim of DKK 6 million, the business pays the last million itself. The sum works together with your deductible and the exclusions that apply.

Supplier business interruption, contingent business interruption (leverandørdriftstab, afhængighedstab)

Recommended. Supplier business interruption covers lost earnings when a key supplier or customer suffers a loss that brings your own operations to a halt. It extends business interruption insurance, which normally only responds to damage at your own premises. If your most important subcontractor burns down and your production stops as a result, this is where the coverage sits.

Underinsurance (underforsikring)

Underinsurance is when your sum insured is lower than the real value of what you are insuring. On a claim, compensation can be reduced proportionally, even where the loss is smaller than the sum insured. If you hold stock worth DKK 2 million but have insured it for DKK 1 million, your payout can be halved.

Workplace accident (arbejdsulykke)

A workplace accident is a sudden work-related event that causes personal injury. It is covered by statutory work injury insurance, unlike an occupational disease, which develops over time. Examples include a fall from a ladder or a cut from a machine.

Frequently asked questions

What does business insurance cover?

Business insurance covers the risks your business creates, both for itself and for others. It usually bundles liability and property together, and can be extended with business interruption, cyber and sector-specific coverage. The exact content depends on the insurer and the policy.

What does business insurance cost?

There is no fixed price. Insurers focus on three things above all: your turnover or total payroll, your industry classification code, and the deductible you choose. Industry matters a great deal, since a tradesperson pays more for liability than a consultant does. A small advisory business therefore pays considerably less than a manufacturer with machinery and stock.

What business insurance does a sole trader need?

A sole trader with no employees and no vehicles generally has no insurance required by law. Take on staff and statutory work injury insurance applies. Use a registered vehicle for business and it needs motor third-party liability insurance. Public liability and other coverage is not required by law, but is often sensible.

What business insurance does a tradesperson need?

A tradesperson typically needs public liability insurance for damage caused at customers' premises, and commercial contents insurance for tools and materials. With employees, statutory work injury insurance is required by law, and a registered company vehicle needs motor third-party liability insurance. Product liability can be relevant if you supply materials or finished products.

Can several types of business insurance be combined?

Yes. Many insurers offer a packaged business policy where liability, property and sometimes business interruption and cyber all sit under one policy. That gives you an overview and often a lower total premium, but check that each individual coverage and sum still fits your risk.

Is cyber insurance required by law?

No. Cyber insurance is not a legal requirement in Denmark. It typically becomes relevant once you hold customer data or depend on digital systems to trade.

Does cyber insurance replace good IT security?

No. Cyber insurance responds after an incident, but it does not substitute for basic IT security. Access management, backups and sound routines still matter, and most insurers expect them as part of the risk assessment.

What is the difference between public liability and product liability?

Public liability insurance covers loss arising from your business's activities, such as a customer being injured on your premises. Product liability insurance covers loss caused by a product you made or sold. In short, one is about what you do and the other is about what you sell.

Is business interruption insurance required by law in Denmark?

No. Business interruption insurance is generally not a legal requirement. You choose it based on your risk and how dependent you are on specific premises or machinery.

What becomes a legal requirement when I hire my first employee?

Once you have employees you generally have to take out statutory work injury insurance, which covers both workplace accidents and occupational disease. Other coverage, such as health or life insurance, is not required by law and depends on your collective agreement and your contracts.

Do I need separate policies for liability and property?

Not necessarily. Some insurers package liability and property in a single business policy, while others keep them apart. What matters is checking which risks are actually covered, what sums apply, and how optional extensions such as business interruption connect to the base coverage.

Used as a reference, this glossary should make it easier to compare quotes, read a set of terms and pick coverage that fits your business. If you want help assessing what you have now, vera, our AI risk advisor, can review your policies and identify any gaps or overlaps.

This glossary is information, not advice. The exact coverage always depends on the insurer, the terms of the policy and applicable Danish law.