Professional liability in Luxembourg: who must have it, what it covers, what it costs

Who must have it?

In Luxembourg there is no general obligation to carry professional liability insurance. It is, however, imposed by regulation on a series of professions: architects and consulting engineers, lawyers, estate agents, travel agencies, medical professions, insurance intermediaries. For these, minimum guarantees are set by the professional body or supervisory authority. For all other freelancers and SMEs it is optional in law and essential in practice: a mistake, a delay or poor advice can put your own assets on the line, and many clients and contracts require a certificate before engaging you.

Operating liability or professional liability?

The two are often confused and cover very different risks. Operating liability (RC exploitation) covers damage caused to third parties in the everyday life of the business: a client slipping in your premises, damage caused at a client’s by an employee. Professional liability (RC professionnelle) covers the financial consequences of a fault, error or omission in the service itself: a structural miscalculation, an incorrect audit report, faulty software, bad advice. Most activities need both; at Foyer, the two are combined in a single RC Entreprise policy, the most common format on the market.

What it costs

Prices depend on turnover, headcount and sector. According to market comparison sites, a freelancer generally sits between €500 and €1,500 a year; an SME with a few employees above that. High-risk professions (construction, medical) and additional guarantees (cyber, ten-year construction cover, business interruption) push the premium up. To obtain an accurate quote, prepare five things: an exact description of your activity and clients, your annual turnover, the number of employees, your claims history (even without compensation) and your current policy if you have one.

The guarantees that make the difference

• Legal protection: included at LALUX and optional at AXA, valuable in a dispute with a client.
• Sector guarantees: post-delivery liability at AXA, ten-year construction cover at LALUX (APROBAT), cyber as an option.
• Business interruption: the guarantee that keeps the business afloat after a major loss.
• Packaging: easyPROTECT PRO (LALUX) bundles professional liability, directors’ liability, fleet, premises and legal protection in one contract; Atouts Pro (AXA) targets businesses of 1 to 30 employees in eight sectors; Baloise separates freelancers from companies, with dedicated construction solutions.

Working on both sides of the border?

The Lorraine tradesman with sites in the Grand Duchy, the Luxembourg consultant whose clients are in Metz or Arlon: European cover is standard in the policies of the major Luxembourg insurers, but check three points in the contract, the exact territorial scope (worldwide activity is negotiated expressly), the competent jurisdiction, and the extensions needed for the United States and Canada. A self-employed cross-border worker will also want to read our article on cross-border insurance.

Compare before you sign

Our Luxembourg professional liability comparison puts Foyer, LALUX, AXA and Baloise side by side on these guarantees, and our professional liability page details the modules (cyber, business interruption, product liability). Just starting out? The tax deductions available to the self-employed are in our dedicated article.