THE SHORT ANSWER
Unionen tells the self-employed to take out business insurance first and sign new contracts afterwards, because otherwise the insurance does not apply if a problem arises from what the contract says. Unionen's pages for the self-employed also describe good, correct contracts as protection in themselves.
This guide explains why the order matters: from which date liability insurance and legal expenses cover apply, which commitments in a contract the insurance covers and what you can check before you sign. Your personal insurance as a business owner is covered in the guide to insurance for the self-employed. [2][1]
Keep these points in mind
- Liability insurance applies to damage that happens while it is in force.
- Legal expenses cover can require the policy to have existed for two years. Otherwise, what the claim is based on must have happened during the policy period.
- Commitments in a contract that go beyond tort law are not always covered by liability insurance.
STEP BY STEP
How to check your cover
See from which date the insurance applies
The start date is in the policy document. In one insurer's business insurance terms from May 2025, liability insurance applies to claims for damages for damage that happens while the insurance is in force. If a series of damage started before the policy period, neither the first damage nor the later ones are covered.
verksamt.se, the authorities' website for business owners, describes liability insurance as cover for the damages the business may have to pay if someone or something is harmed by its products or services. According to verksamt.se, it is important to review which insurance you already have when you start a business.
[4][3]Read the terms for legal expenses cover in a dispute
Legal expenses cover pays lawyers' fees and court costs when the business ends up in a dispute. In the same terms, it applies to disputes that arise during the policy period if insurance for the same business has been in force for at least two years in a row. Time with equivalent insurance at another insurer can be counted.
If the insurance has existed for less than two years when the dispute arises, those terms give legal expenses cover only if the events or circumstances behind the claim happened while the insurance was in force. A contract signed before the insurance started can therefore fall outside the cover, which is what Unionen warns about.
[4][3][2]Compare the contract's commitments with your liability insurance
The liability insurance in those terms covers liability for damages under general tort law and some industry terms. If you promise in a contract to pay more than that, that part may fall outside the insurance. The same terms do not cover fines, sanction charges or contractual penalties.
Read the contract's rules on liability, limitation of liability and penalties next to the policy document and the terms before you sign. If something is unclear, you can ask the insurer whether that wording is covered.
[4]Check how a dispute is to be resolved
Unionen draws attention to arbitration clauses. Such a clause means that a dispute is decided by an arbitration panel instead of a general court. According to Unionen, the parties then pay for the lawyers involved, which can become very expensive and make it hard for a self-employed person to claim their rights.
Read what the contract says about where a dispute is to be tried, and read in the terms which costs legal expenses cover pays in that case. Unionen says each person needs to consider which solution suits them.
[2][4]
If there are several of you in the business
Unionen says the awkward questions also need to be in a partnership agreement, and that in a limited company these questions are handled in the shareholders' agreement. It can also say how a dispute between you is to be decided.
A jointly owned business can affect unemployment benefit. According to Sveriges a-kassor, a business owner normally needs to stop all activity, by closing the business or making it dormant, before benefit can be paid. Unionen points out that problems can arise if a co-owner does not want to close the business or make it dormant.
[2][1][5]If you also have a job
If you combine the business with a job, Unionen says it is important to be open about the business and to have the permission written into your employment contract. The duty of loyalty applies throughout the employment, and a non-compete clause can apply for a time after the employment has ended.
Your cover in both roles, from sickness benefit to unemployment benefit, is covered in the guide to running a business alongside a job.
[2]Keep insurance and contracts side by side
Keep your policy documents and terms in My Forsio, so that start dates and terms are in one place. Each detail shows the passage it came from. If the terms are missing, the detail is shown as Not verified, not as confirmed absent.
Forsio does not assess which insurance the business needs and does not decide what an insurance policy pays in a dispute or after damage. The insurer decides that. Forsio is not an insurance intermediary and does not provide insurance advice.
Fictional example
One contract, two dates.
Sara is a consultant with her own limited company. She has been sent a contract to sign and has just taken out business insurance.
- The insurance applies from
- 1 March
- The contract is signed
- 15 FebruaryPotential gapThe contract is signed before the insurance's start date.
- Penalty in the contract
- Not verifiedRead whether the terms cover the penalty.
The contract is signed before the insurance's start date, and the penalty needs reading in the terms. Whether she changes the date or the contract is Sara's own decision.
Common questions
Why should business insurance come before the contract?
Unionen says that otherwise the insurance does not apply if a problem arises from what the contract says. In one insurer's terms, legal expenses cover for a policy that has existed for less than two years is given only if what the claim is based on happened while the insurance was in force. [2][4]
Does liability insurance cover everything I promise in a contract?
Not always. In the same terms, liability insurance covers liability for damages under general tort law and some industry terms, and it does not cover contractual penalties. A commitment that goes beyond tort law can therefore fall outside the insurance. Read the contract's liability rules next to the terms. [4]
What is the difference between liability insurance and legal expenses cover?
Liability insurance applies when someone claims damages from the business for damage that is covered. The insurer then investigates the claim, negotiates and pays the damages above the excess that the business is liable to pay. Legal expenses cover pays lawyers' fees and court costs when the business ends up in a dispute. verksamt.se lists both among insurance for businesses. [4][3]
Does my home insurance cover my business?
No. According to verksamt.se, home insurance only covers items used for private purposes, and it does not cover your business. The business's property and liability are insured through business insurance instead. [3]
What is an arbitration clause?
An arbitration clause in a contract means that a dispute is to be decided by an arbitration panel, a private court, instead of a general court. According to Unionen, the parties then pay for the lawyers involved, which can become very expensive. [2]
Can I get unemployment benefit if I run the business with someone else?
According to Sveriges a-kassor, as a business owner you normally need to stop all activity, by closing the business or making it dormant, before you can be paid. Unionen points out that problems can arise if a co-owner does not want to do that. Ask your unemployment fund what applies in your case. [5][1]
MY FORSIO
See when your insurance started.
Keep policy documents and terms in My Forsio and see start dates and terms in one place, with the passage each detail came from. Free for individuals.
Sources and references
Sources checked
This guide explains general principles of Swedish insurance. Your policy schedule and terms set out what applies to you.
- Unionen: review your insurance as a self-employed person
- Unionen: write correct and secure contracts as a self-employed person
- verksamt.se: insurance for your business and for you as a business owner
- Insurance terms: business insurance with liability and legal expenses cover, in force from 2025-05-01, sections 4 and 5
- Sveriges a-kassor: unemployment benefit for business owners and the self-employed