Who bears the cost of a mistake: you as the client, or the freelancer? Do they run their own risk, or are they safe like an employee? Whether a freelancer carries commercial risk is one of the nine Dutch DBA Act factors.
In this article you will learn what commercial risk means under the DBA Act, which concrete examples fall under it, and why it is a strong sign of independence. You will also see how to recognise and strengthen this point in your collaboration.
This blog is for clients: IT managers and hiring managers who want to know whether their freelancer carries risk as a genuine entrepreneur.
Commercial risk is factor 8 of the Deliveroo ruling, one of the nine factors the Tax Authority uses to assess your working relationship. Want the full overview? Read our guide to the 9 assessment factors of the Dutch DBA Act.
What does commercial risk mean under the Dutch DBA Act?
Commercial risk means the freelancer themselves bears the consequences if something goes wrong. Think of liability for mistakes, fixing work at their own expense, and the risk of damage or complaints. If they run that risk, they behave as an entrepreneur, not an employee.
An employee runs barely any commercial risk: if they make a mistake, the employer usually bears the consequences. An entrepreneur is on the hook themselves. That difference is exactly what this factor exposes. The more own risk, the stronger the picture of independence.
What examples of commercial risk are there?
Commercial risk comes in various forms. The more of them apply to the freelancer, the more clearly they operate as an entrepreneur.
- They are liable for mistakes and must fix them at their own expense
- They have their own liability insurance
- They make own investments in equipment, software or training
- They bear the risk if the assignment is not carried out well
- They can miss income for poor or late work
- They work on the basis of an obligation of result, not just effort
The liability for mistakes and fixing at their own expense are especially telling. A genuine entrepreneur stands behind their work. An employee who makes a mistake gets a conversation at most, but no bill.
Why is own risk a strong sign of independence?
Because it shows the freelancer operates as a business, with all the consequences that entails. Someone who fixes their own mistakes, has their own insurance and invests, carries entrepreneurial risk. That is fundamentally different from an employee protected by their employer.
This factor relates closely to the level of the rate. An entrepreneur charges more partly for this reason: they must cover their risks and pay their insurance. Carrying risk and a higher rate go together, and together strengthen the picture of genuine independence.
For you as a client, this is favourable to see. A freelancer who carries their own risk takes responsibility for the quality of their work. That is good not only for your Dutch DBA Act position, but also for the outcome of your project.
How do you recognise and strengthen this in your collaboration?
Place the responsibility for the result and the fixing of mistakes with the freelancer. Work with an obligation of result, not just an obligation of effort. Ask whether they have liability insurance. That way you make the commercial risk visible and strengthen the independence.
A few practical principles:
- Agree an obligation of result, not a pure obligation of effort
- Record that the freelancer fixes mistakes at their own expense
- Ask about their own liability insurance
- Let them use their own equipment and resources where possible
- Make sure the agreements match the practice
Note that this must genuinely match. A contract saying the freelancer carries risk, while in practice you absorb all the mistakes yourself, does not convince. The Tax Authority looks at how it really goes, not just at the agreements on paper.
Frequently asked questions about commercial risk
Must a freelancer have liability insurance?
It is not a statutory requirement, but a strong signal of entrepreneurship. Own liability insurance shows the freelancer covers their own risks. It strengthens the picture that you are dealing with a business and not disguised staff.
What if I absorb mistakes myself in practice?
Then you weaken this factor. If you bear all the consequences, the freelancer runs no real commercial risk, and looks more like an employee. Place the responsibility for fixing with the freelancer where possible, and make sure it actually works that way.
Does an obligation of result count for this point?
Yes. An obligation of result means the freelancer stands behind the end result and carries risk if it is not right. That is a stronger entrepreneur signal than an obligation of effort, where they only have to do their best. It relates to the nature of the assignment.
How much risk must a freelancer run?
There is no fixed minimum. The point is that there is genuine entrepreneurial risk: liability, fixing at own expense, own investments. The more of this is present, the stronger the signal. One element is rarely enough; the whole counts.
Does this factor weigh more heavily than the other eight?
No, there is no ranking. Commercial risk is weighed together with the other eight factors into an overall picture. It does relate closely to the rate and to entrepreneurship, and that combination often gives a clear picture of independence.
Conclusion: own risk belongs to genuine entrepreneurship
Whether your freelancer carries commercial risk says a lot about their independence. Liability, fixing at own expense, own investments and insurance point to a genuine entrepreneur. If you absorb all the risks in practice, that weakens the picture.
For whom is this most urgent? For clients who in practice bear all mistakes and risks themselves. For whom less? For those working with a freelancer who demonstrably runs their own risk and is insured.
My advice: place responsibility and risk with the freelancer where possible, and make sure it matches the practice. That strengthens your Dutch DBA Act position and the quality of the work.
Unsure whether your assignment holds up on all points?
Want to look together at whether your working relationship holds up on the nine factors, and which construction fits? Plan a no-obligation call with me. We go through your situation, with no strings attached.
Note: regulations around the Dutch DBA Act may change. For current information, consult rijksoverheid.nl or belastingdienst.nl. This article is general information, not legal advice. For complex situations, I advise consulting an employment lawyer or tax advisor.
