What insurance policies do I need as an entrepreneur?
Starting a business and being an entrepreneur involves learning a lot of new things, starting with which of all the available insurance policies are compulsory for entrepreneurs. After all, insurance should be properly in place when starting a business.
If you employ only yourself as a self-employed person, the insurance policy you must take out is the self-employed person’s pension insurance, i.e. YEL insurance. You must also pay the self-employed person's health insurance contribution. The health insurance premium is included in the withholding tax percentage, so you do not need to pay it separately. The contribution is paid to the tax authorities together with the taxes.
It also depends on the sector you operate in whether you need other compulsory insurance in addition to YEL insurance.
Compulsory and voluntary insurance policies for entrepreneurs
Insurance policies for the self-employed
|
Mandatory or optional? |
| YEL insurance, ie. self-employed person’s pension insurance | Mandatory |
| Motor insurance | Mandatory, if the business owns vehicles |
| Insurance policies for employees | Mandatory, if the business has employees |
| Accident insurance | Optional |
| Life and disability insurance | Optional |
| Medical expenses insurance | Optional |
| Property insurances | Optional |
| Business interruption insurance | Optional |
| Liability and legal expenses insurance | Optional |
Why is YEL insurance mandatory?
YEL insurance is the basis for pension and social security for an entrepreneur. Therefore, the insurance is statutory, i.e. mandatory. The YEL insurance covers your income in case of old age, disability or the death of a family provider. The daily allowances paid by Kela, such as sickness and parental allowance, are also calculated on the basis of confirmed income. In addition, confirmed income determines the amount of unemployment benefits.
For whom is YEL insurance mandatory?
You must take out an YEL insurance policy, if:
- you are between 18 and 67 years old
- you work as a self-employed person for at least 4 consecutive months
- Your YEL income is at least EUR 9,208.43 per year (in 2025)
- you work for your own company
- you live in Finland
Your company’s form of company and ownership share affect whether you or not you must take out an YEL insurance policy. Any ownership through another company, i.e. an intermediate company, will also have an impact on the pension law under which your pension cover is insured.
When should YEL insurance be taken out?
You must take out YEL insurance when the above conditions for insurance are met in your entrepreneurial activities. You should take out an insurance immediately, but at the latest within six months of your company meeting the conditions for YEL insurance. Self-employment under the Self-employed Persons’ Pension Act means, precisely in terms of its scope, a business activity in which the conditions in the previous paragraph are met. At the very beginning, you might have small or occasional business activities and therefore do not yet need to take out YEL insurance.
If the insurance is taken out retroactively, it must take effect from the start of the work of the insured person.
What you need to know about confirmed income?
YEL income must correspond to the monetary value of your work contribution. When taking out YEL insurance, you must estimate the amount of your confirmed income. We will provide you with a recommendation for your work performance to help you with your assessment. We will then separately confirm your annual work income equivalent to your work contribution.
What happens if you do not take out YEL insurance?
As a self-employed person, you are responsible for taking out YEL insurance within six months of becoming self-employed. If the insurance is taken out later, you may have to pay an increased employment pension contribution.
The State Treasury is responsible for deciding on the payments resulting from non-payment. The pension insurance company sends a separate invoice for the non-payment after the State Treasury has sent the decision on the non-payment.
The Finnish Centre for Pensions supervises employment pension insurances. The Finnish Centre for Pensions may take out YEL insurance on behalf of and at the expense of an entrepreneur. In such a case, you would no longer be entitled to a discount for new entrepreneurs.
You can take out YEL insurance retroactively for the current year and the three preceding years. You cannot retroactively accumulate pension cover for any period earlier than this.
Can YEL insurance ever be optional?
Yes, but only in two cases. Firstly, the YEL insurance may be optional if your business as an entrepreneur is so small that your income does not exceed the minimum income required by law. This lower limit is updated annually. In 2025, the minimum limit is EUR 9,208.43. YEL insurance may also be optional if you are already on old-age pension in accordance with the Employment Pensions Act and then work as an entrepreneur.
What are the mandatory sector-specific insurances that a self-employed person must take out?
In some sectors, entrepreneurs must also take out other mandatory insurances in addition to the YEL insurance. Anyone providing a health care or medical service needs patient insurance to cover damage caused to the patient in the course of medical treatment.
Environmental damage insurance is mandatory for a large proportion of companies that need an environmental or chemical permit for their business. If motor vehicles or trailers are used, motor insurance is mandatory under the law.
For more information on industry-specific mandatory insurance policies, please contact the non-life insurance companies that provide them.
What insurance policies should an employer take out?
As an employer, you must take care of your employees' pension cover, i.e. TyEL insurance and insurance against accidents at work and occupational illnesses, which also includes group life insurance contributions for employees.
What are the optional insurances for an entrepreneur?
For an entrepreneur, the various risks to health or the financial situation of the company are greater than for an employee. If the risks materialise, the business as a whole could temporarily cease to operate.
As an entrepreneur, you can supplement both your own and your company's cover with different types of insurance. Optional insurance policies for entrepreneurs include accident insurance, health insurance, travel insurance and life insurance. Insurance policies related to the company’s operations and assets include liability insurance, legal expenses insurance, property insurance and business interruption insurance.
Some of the optional coverage is linked to the validity of your YEL insurance and your confirmed income.
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