South Korea expands insurance safety nets for small businesses

South Korean government agencies and the insurance industry are launching multiple initiatives to strengthen the social safety net for small business owners and young entrepreneurs.

Through a partnership involving the Financial Services Commission and various local governments, a 30-billion-won mutual aid fund is being used to provide free insurance to approximately one million small business owners across seven regions. These products include credit life insurance to cover loan repayments in the event of death or critical illness, as well as non-life insurance covering fire, business interruption, and cybercrime such as phishing.

Additionally, the Ministry of SMEs and Startups has announced plans for a ‘Startup Relief Policy Insurance’ targeting young entrepreneurs with less than five years of operation. This proposed program aims to subsidize 60% to 80% of premiums and provide up to 20 million won for re-startup costs in cases of business closure due to disaster or illness. Other proposed measures include childcare allowances for solo entrepreneurs and expanded support for employment insurance.

In the environmental sector, DB Insurance is collaborating with the Ministry of Environment and the Korea Federation of SMEs to subsidize up to 50% of environmental liability insurance premiums for small and medium-sized enterprises, aiming to enhance their capacity to respond to environmental accidents.