If you’re an entrepreneur in Germany, you probably already know that while employees are covered by their employers, business owners and the self-employed have to take care of their own insurance. To help you figure this out, we’ve put together an overview of the insurance cover you’ll need in Germany.
- Protect yourself & your business
- Choosing the right type of insurance
- Important insurance policies
- A quick guide to business insurance
- Insurance for different sectors
- Important types of private insurance
- A quick guide to private insurance
- Self-employed & part-time employed?
- Social security & managing directors
- Compare insurance offers regularly
Unlike employees, the self-employed bear business and personal risks to secure their livelihood. Absence due to illness, damage to business property or legal disputes and their associated costs can put your business at risk. If you do employ staff, you must have adequate insurance coverage – especially for occupations where there is an increased risk of accidents.
When determining your insurance needs, you should identify the risks that are specific to your business and that you need to cover, depending on the industry and size of your business. It is important to assess which types of insurance are relevant to the business and which are relevant to you.
Some types of insurance should be taken out at the start of a business, while others can be taken out later when the financial situation of the business allows it.
However, you should start by insuring yourself against the risks that can cause the most financial damage to your business. To do this, you can rank all the risks in order of probability.
Ask yourself the following questions to assess your business’s insurance needs:
- What are my business risks?
- How likely are these risks to occur?
- What is the financial impact of these risks?
The following table gives a rough ranking of business insurance needs for most businesses. However, you should create your own priority list based on your circumstances.
|Type of insurance||What does it cover?|
|Very important insurance coverage||Betriebsversicherung / Berufshaftpflicht-versicherung |
Business insurance / Professional liability insurance
This insurance is compulsory and is suitable for doctors, lawyers, accountants & all commercial businesses.
|Berufs- als Vermögensschaden-Haftpflicht-Versicherung |
Professional indemnity insurance to cover financial loss
Useful for anyone who works professionally with others’ assets,
Business interruption insurance
|Important types of insurance||Firmenrechtsschutz-versicherung |
Business legal protection insurance
|Risikolebensversicherung für Unternehmer |
Term life insurance for entrepreneurs
|Means-tested insurances||Produkt-Haftpflichtversicherung |
Product liability insurance
Environmental liability insurance
This type of insurance is usually included in professional and public liability insurance, but can also be purchased as part of a bespoke insurance package.
Every industry has its own special features. Insurance needs are no exception. For example, if you have a business in one of these sectors, seek out industry-specific insurance:
- Building trade
- Agricultural professions
- Communities and associations
- Skilled trades
- Freiberufler & service providers
Expert advice is recommended for all insurance coverage. Perhaps an insurer specialising in occupation-specific policies will give you the protection that other more generic coverage cannot. Hiscox, for example, offers industry-specific professional indemnity policies that can be tailored to meet individual client needs.
The self-employed need to insure themselves personally as well as their business. No matter how good your business insurance is, if you have an accident and become partially incapacitated, even the best business insurance will not help you.
|Type of insurance||Details|
|Compulsory insurance coverage||Krankenversicherung & Pflegeversicherung |
Health insurance & long-term care insurance
Daily sickness allowance insurance
Travel health insurance
|Very important insurance coverage ||Rentenversicherung |
|Directors & officers insurance|| |
Occupational disability insurance
State subsidies for the self-employed
If you have a second job while being self-employed, you may encounter issues with insurance, particularly health insurance.
When assessing your insurance obligation, the insurer will check whether you are really self-employed as your main job and what the relationship is between the side business and your employment.
If you’re a managing director of a GmbH or UG, you may be wondering whether you’re liable for social insurance contributions. The answer is not so simple as it depends on several factors. The social and labour courts have been debating this issue for some time. For directors of an AG (stock company), however, the situation is somewhat clearer: they are generally required to pay social insurance contributions.
It’s important to not only compare prices and benefits when you first get insurance but also regularly. It’s a good idea to review your policy whenever it’s about to expire or if you ever feel like the coverage isn’t enough. Keep yourself and your business protected!
It’s always a good idea to take a look at your insurance documents now and then and ask yourself a few probing questions:
- Do I still need all the insurance I have?
- Has my business grown? Is everything I’m doing still covered?
- Has my risk profile changed? (If so, let your insurance company know and make any changes to your policy that you need to.)
Starting a business is an exciting venture. However, understanding the not-so-exciting things such as the different types of insurance available to you will put you ahead. In the beginning, your income may not always be stable, which can cause financial pressure. That’s why it’s so important to understand the optimal level of insurance that will protect you and your business. Getting this delicate balance right will help you weather the storms of the market while freeing up more money to invest in growing your business.