Insurance cover

1. Insurance cover of the staff

Cooperatives are quite variable in their structuring. That is why there is no uniform rules for insuring their staff or their insurance obligation.

Consequently, you have to examine case-by-case the statutory insurance obligations of your cooperative. If these conditions are met, you will have to underwrite policies in companies specialized in those insurances.

2. Statutory insurances

Pension insurances

Every employer must underwrite pension insurance for their employees. Any work executed under a private employer must be insured under Employees Pension Act (TyEL) if the employee earns at least € 61.37 per month in 2021 and is between 18 and 67 years of age. The insurance obligation starts from the beginning of the month succeeding the person’s 18th birthday and ends at the end of the month, during which the employee turns 68. In principle, any person working alongside their pension must be insured until the age of 68.

The insurance policy must be underwritten in the month following the first month paid to the employee.

The pension provision can be arranged by taking a policy from an employment pension insurance company (employer by contract) or paying the contributions monthly to an employment pension insurance company (temporary employer).

The employer is considered “by contract” if at least one permanent employee is employed or if the continuous total salary bill during six months reaches € 8,790 (the year 2021).

The employer is “temporary” if there are no permanent employees, and the total salary bill of the temporary employees during six months is under € 8,790 (the year 2021).

A member employed by the cooperative may be covered by Self-Employed Persons’ Pensions Act (YEL) if the member in question is in an executive position in the cooperative: he or she might be authorized to sign alone on behalf of the cooperative or have a place in the bodies of the cooperative, the member’s shareholding and voting rights are more than 30 % or, together with members of his or her family, more than 50 %.

More information the updated percentages concerning TyEL and YEL:stä are available from the companies and from the Finnish Centre for Pensions as well as from the pages “cooperative as an employer”. 

Occupational injury insurance, unemployment insurance, and group life insurance

As an employer, the cooperative must take statutory occupational injury insurance for their employees under contract if there are more than 12 working days in a year (Workers’ Compensation Act).

Furthermore, the statutory occupational injury insurance is complemented by a group life insurance according to the industry’s collective agreement in question and as statutory unemployment insurance.

3. Voluntary Personal Insurance

The cover of the statutory personal insurances can be enlarged and improved by different kinds of voluntary personal insurances, like individual pension schemes, life insurance, medical expense insurance and private accident or travel insurances.

4. Property Insurances

In order to cover property risks, the insurances companies offer various solutions. The traditional property insurances include the so-called special insurances permitting to cover the immovable and movable property of the cooperative. They can be fire insurances, breakdown insurances, housebreaking and burglary insurances.

The so-called combined insurances cover very well the needs of property insurance of the cooperatives. They can be engineering insurances, real estate insurances, horticultural insurances, and so on.

The cover of so-called all-risk insurance policies is the largest. In principle, they compensate for any sudden and unforeseen damage-causing event involving property not excluded in their respective terms. They are called all-risk property insurances, “business insurance” for the commercial and service sectors, contractor’s all-risk insurance, and electronic device insurance.

5. Insurances for Operations

As a result of fire damage or other property damage, the business activities can be discontinued or disturbed for a long time, in which case the business revenue of the cooperative is reduced or depleted. Despite the loss of income, the cooperative must pay all fixed costs like salaries, rents, and interests for debts.

These costs can be covered, and the outcome of the economic activity can be assured by underwriting a loss-of profit insurance. These can be fire insurances, machinery insurances, and business interruption insurances. A “business insurance” offers an extensive loss-of-profit cover. Its coverage can also be enlarged with personal business interruption coverage, providing cover for the company in case of an accident or critical personnel’s death.

According to the Finnish Tort Liability Act, the employer’s responsibility covers in principle all damages caused by an error or a deficiency of an employee working for the cooperative. With a third-party liability insurance, the cooperative can transfer a part of its liability to an insurer. This insurance covers the cooperative’s responsibility for personal injury or property damage caused during its operation to own or third-party workers.

A products liability insurance allows preparing for personal injury or damage to property caused by defective or erroneous products. Under the Finnish Product Liability Act, the responsibility concerning any damage caused by a product is a so-called “strict liability”, under which the liability is not dependent on negligence. There is product liability as soon as the product is not as secure as reasonably should have been presumed.

A legal protection insurance compensates, according to its terms, for the legal expenses and costs of litigation in case of a damage event related to the economical activity mentioned in the policy.

The damage and personal risks of a cooperative are considered “under control” if its insurance needs are carefully identified, an insurance plan is drawn up, the risks are taken care of with a sufficient cover and the insurance needs are under continuous review.

6. Vehicle and transport insurances

According to Finnish law, a motor liability insurance is compulsory for all registered vehicles. It provides compensation for all personal injuries caused in traffic and the damage caused to the property of the innocent party.

There are different options to ensure lorries and trucks, vans and passenger cars, and tractors to cover vehicles’ damages.

Among different transport insurances, freight transport insurance assures the appropriate coverage of the chosen amount for shipments of goods. The freight to be transported by the cooperative can be insured with single shipment insurance or with a flexible transport insurance policy.

The carrier taking care of the removal of goods is liable for the transport damage caused to the goods with their responsibility area. A road transport insurance is intended to compensate for the transport liability falling on the carriers.