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Overview of Business Insurance in Portugal

By Rauva

Published on 31 January 2024

11mins read

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Starting a small business in Portugal needs more than just a solid business plan; it's about safeguarding your venture against potential pitfalls, and the armour you'll need that can offer this protection is the right set of insurance policies.

But there are so many options to choose from, and the insurance industry is notoriously difficult to navigate. What policies do I need? Is it mandatory or simply recommended? What does each policy cover?

Our guide to small business insurance is here to help.

Which Insurance Policies are Mandatory for Small Businesses in Portugal

When starting a small business in Portugal, it's crucial to understand the legal requirements regarding insurance. Below is a table that categorises the mandatory and recommended insurance policies for small businesses in Portugal, with a detailed explanation of each insurance type below:
Type of InsuranceStatus for Small Businesses
Employer's Liability InsuranceMandatory
Professional Liability InsuranceRecommended
Public Liability InsuranceRecommended
Motor Vehicle Insurance (if applicable)Mandatory (if the business owns vehicles)
Health InsuranceRecommended (as an employee perk)
Commercial Property InsuranceRecommended
Business Interruption InsuranceRecommended
Directors and Officers Liability InsuranceRecommended (especially if the business has a board or advisory committee)
Workers' Compensation InsuranceMandatory
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Types of Insurance Policies for Small Businesses in Portugal

Mandatory - Any business employing staff needs this. It defends against claims from workers who might be injured or fall ill due to job-related activities.

Recommended - For professionals whose errors can lead to client losses, this insurance, often termed Errors & Omissions, is invaluable.

Recommended - Protect your business from claims by third parties for property damage or injuries, especially crucial for businesses with physical footprints.

Mandatory (if your business owns vehicles) - For businesses with vehicles, this offers coverage against damages, accidents, and third-party claims.

Recommended - A potential employee incentive, this ensures they're covered for health contingencies.

Recommended - Secure your tangible business assets, such as equipment, buildings, and inventory, against unforeseen events.

Recommended - Helps businesses maintain financial stability during interruptions, covering lost income and other overheads.

Recommended - Shields top-tier leaders of a company from personal losses if they're found accountable for wrongful acts in their roles.

Mandatory - A legal requirement, it supports employees who suffer injuries or illnesses due to work-related circumstances.

How to Select the Perfect Business Insurance Policy

Assess Your Business Risks:

Every business is unique, and so are its risks. Evaluate the potential hazards your business might face, be it natural disasters, theft, lawsuits, or any other threats.

Understand Terms and Policy Types:

Familiarize yourself with the various insurance terms and types available, such as liability, property, workers' compensation, and more, to identify which ones resonate with your business needs.

Consult with a Specialist:

Insurance brokers or agents have in-depth knowledge of the market. They can offer personalized recommendations and help you negotiate the best options.

Compare Quotes:

Don't settle for the first offer. Obtain quotes from multiple insurers, analysing coverage details, limits, deductibles, and premium rates.

Evaluate the Insurer's Reputation:

Opt for an insurance provider with a robust track record, positive customer reviews, and a reputation for settling claims promptly.

Review Policy Exclusions:

Every policy has exclusions. Ensure you're aware of what's not covered to avoid unexpected surprises during a claim.

Opt for Adequate Coverage Limits:

Your chosen policy should provide sufficient coverage to rebuild your business from scratch in case of a total loss. Under-insuring might save you money on premiums but could be costly in the event of a claim.

Consider Package Deals:

Many insurers offer Business Owners Policies that bundle multiple coverages into a single package, often at a discounted rate.

Stay Updated:

As your business evolves, your insurance needs will shift. Regularly review and update your policy to ensure it aligns with your current business situation.

Ask Questions:

Don't hesitate to ask your insurer about any ambiguities. Clarity now can prevent misunderstandings later.


Are all these types of insurance obligatory for my business in Portugal?

While some, like Workers' Compensation, are compulsory, others vary based on business type and scale. Always check with local regulations.

How can I negotiate the premium and coverage amount?

It may be possible to negotiate aspects of the policy. This depends on your business size, operational nature, employee count, among other factors. An insurance specialist can offer guidance.

Is it possible to combine different insurances for a better rate?

Absolutely. Many insurance providers furnish bundled packages tailored for businesses, often at a reduced rate.

How often should I review and update my insurance policies?

It's wise to review your policies annually or when there are significant changes to your business, ensuring you're always adequately covered.

Can I transfer my existing insurance policies if I relocate my business within Portugal?

While some policies might be transferable, others could be location-specific. It's advisable to consult with your insurer before relocating.

What should I do if I feel my insurance claim was unjustly denied?

Firstly, understand the reason for denial from your insurer. If you believe it's unfair, consider legal advice or mediation.

Are online businesses equally susceptible to risks and hence, need insurance?

Yes, online businesses face unique risks like cyber threats, and thus, require tailored insurance policies to protect them.

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Written by Rauva

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Rauva is partnered with Swan who will be providing all payment services to Rauva clients. Rauva does not have access to client funds. Funds are kept in accounts provided by Swan, held in BNP Paribas. Swan is an EMI, based in France, supervised, and regulated by ACPR/Banque de France. Swan is authorized to carry out such services in Portugal and registered with Banco de Portugal under the registration number 7893.
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