A client contract can create risks your private liability never covered
Review professional activity, financial loss and contractual promises before signing.
Professional work changes the exposure
A private liability policy should not be assumed to cover paid professional activity. A client may claim damage to property, bodily injury or a purely financial loss caused by advice or missed work. Those categories can require different professional covers. Start by describing the actual activity and potential claims. The official SME guidance treats business risks separately from personal protection, a distinction that becomes especially important when clients use demanding contracts.
Read promises before the price
Identify indemnities, liability limits, guarantees of outcome, confidentiality obligations and countries where disputes may arise. A contract can impose responsibilities beyond the insurance’s ordinary scope. Do not assume an insurer will pay merely because you accepted a promise commercially. Ask a legal specialist about clauses you do not understand and the insurer about their insurability. These are complementary checks: legal permission and insurance cover answer different questions.
Define the activity accurately
List core services, ancillary advice, subcontractors and handling of client property or data. Update the insurer when you expand into a new field. Compare professional and operating liability according to actual wording rather than similar names. Check whether purely financial loss is included, excluded or confined to specific services. A low premium based on an incomplete activity description is not a reliable saving and can leave the comparison meaningless.
Hypothetical missed deadline
A consultant’s delayed report causes a client to allege CHF 30,000 lost revenue. Nobody was injured and no object was damaged. A policy focused on bodily injury and property damage may not answer that claim. The example does not determine liability or coverage; it shows why pure financial loss needs explicit review. Defence costs, deductible and notification conditions matter even when the underlying demand is disputed and may ultimately be unfounded.
Timing can determine the response
Ask how the contract identifies the insured event and handles work completed before inception or claims reported after closure. Different policies use different triggers and retroactive conditions. Preserve project records, acceptance emails and changes of scope. Notify according to the policy procedure before admitting liability or agreeing a settlement. The right steps depend on the contract; seek the insurer’s instructions instead of improvising a response under client pressure.
Liability and legal protection are different
Liability may address insured compensation claims and associated defence. Legal protection can cover selected disputes and legal expenses under its own terms, but not necessarily the compensation itself. Contract disputes, debt collection and claims between partners require separate checks. Compare limits, territory, exclusions and lawyer arrangements. Do not buy one expecting it to perform every role of the other, and do not assume an already known dispute will be accepted.
Use the client contract as a review document
Bring representative contracts, activity descriptions, turnover and past claims to Clearwise. Ask for written confirmation of relevant cover rather than an abstract reassurance. A professional legal review may help negotiate excessive promises, while insurance transfers only the risks actually accepted. Maintain a contract-and-policy checklist for new assignments. It is easier to align terms before a project begins than to discover the mismatch when an important client is already demanding payment.
Sources and further reading
Original Clearwise analysis. External reporting provides context; rules and contract terms must be verified with the competent authority or provider. Some press articles may require a subscription.
- Reference Swiss SME portal: self-employment guidance ↗
- Reference Swiss SME portal: social insurance ↗
Apply this to your situation
Compare your actual documents and clarify what matters before making a commitment.
Request a free consultationGeneral guidance, not a binding quote or personalised legal, tax or investment advice. Examples are hypothetical and results are not guaranteed.
