why does the insurer want to know exactly what my business does

The description of activities determines the risk the insurer assumes

The insurer wants to know what your business does because that directly determines the risk it insures. Liability insurance for a software company covers different damage scenarios than insurance for an installation company or a consulting firm. The exact activities determine the premium, the exclusions, and sometimes whether coverage is possible at all. This belongs to the same question as does the enterprise have liability insurance for businesses: the insurer not only checks whether you are insured, but also whether the coverage matches what you actually do.

In practice, the insurer usually asks for the SBI code (Standard Business Classification) from the Business Register, supplemented with free text about the actual activities. An SBI code alone is often too broad: two businesses with the same code can have very different risks. Therefore, fill in the description as it appears elsewhere in your chain file, so that it matches what you have stated in in which sector is the enterprise active entered. Inconsistent descriptions between forms stand out and often result in an inquiry, not because something is wrong, but because the insurer cannot then determine the risk.

Where this follows from: Business Register Act and the insurer's own policy conditions

The description of activities and SBI code that the insurer assumes come from the data recorded under the Business Register Act 2007 for each enterprise. This law regulates which business data must be registered, including business activities. The insurer also has its own acceptance and underwriting policy that is not laid down in legislation, but in the insurer's own policy conditions: this is why two insurers may ask different questions about the same activities for the same business.