Business trip motor cover: private cars on company business in Germany
If your German entity lets employees drive to clients in their own cars, German case law puts the accident risk on you, not on them. The Federal Labour Court treats damage to the employee's car as an expense incurred on the employer's behalf, and it does not matter that the employer did nothing wrong. Business trip motor cover (Dienstreisekaskoversicherung) is the policy built for this: comprehensive cover for vehicles you do not own, valid only while they are on a business trip.
Does a German employer have to pay for accident damage to an employee's private car?
As a rule, yes. The Federal Labour Court (Bundesarbeitsgericht, BAG) applies section 670 of the Civil Code by analogy: if an employee uses their own vehicle in the employer's sphere of activity with the employer's approval, and receives no special payment for the accident risk, the employer must reimburse the damage (BAG, 28 October 2010, 8 AZR 647/09). No fault on the employer's side is required. The driver's own fault reduces the claim: not at all for slight negligence, proportionally for ordinary negligence, and usually to zero for gross negligence.
Why the employer pays even without being at fault
The reasoning of the German courts is straightforward. Had the employee not used a private car, the business would have had to provide a vehicle and bear its accident risk. Sending staff out in their own cars does not shift that risk to them. The court therefore treats the damage like an expense incurred in the employer's interest. Two conditions apply: the employer approved the use of the car, and the driver is not separately paid for carrying the accident risk.
This surprises many international employers, because the standard mileage allowance does not count as such a payment. According to the BAG it compensates fuel, wear and running costs, not accidents. A company that pays €0.30 per kilometre and assumes the matter is closed is mistaken. Only an explicit, agreed supplement for the accident risk would change the picture.
What the policy does instead
The policyholder is the company, club or association. The insured vehicles are the ones it does not own: cars, often motorcycles, belonging to employees and, depending on the contract, to volunteers, board members or freelancers. Cover is fully comprehensive and starts when the approved trip begins. The claim runs through the employer's contract, so the driver's private comprehensive policy is not touched.
For day to day management that is the real benefit. Without insurance every accident leads to a conversation between manager and employee about degrees of negligence and shares of the bill. With it, the business reports the claim, the garage repairs the car, and only the agreed excess remains to be allocated.
Loss of no-claims discount
When the driver causes the accident, their private third party liability insurer pays the other side and then downgrades the driver's no-claims class. The higher premiums of the following years are also a consequence of the business trip. In the case decided by the BAG in 2010 the employee claimed €869 for this. Older BAG case law, however, regards the liability downgrade as settled by the mileage allowance where one is paid, so the legal position is less clear than for the damage to the car itself.
Many contracts therefore offer a no-claims discount module (Rabattverlust). It makes up the extra premium caused by the downgrade, usually for a limited number of years and up to a ceiling. Whether it covers only liability or also the driver's private comprehensive policy is a point of wording we compare before placing the risk.
Clubs, associations and volunteers
Coaches drive to away matches, board members to meetings, helpers collect equipment, nearly always in their own cars. For board members, section 27 (3) of the Civil Code refers to the law of mandate and therefore to section 670; for volunteers acting on the club's instruction the same idea applies. A mere favour is different: the Federal Court of Justice refused a claim against a club by a grandmother who drove her granddaughter to a match.
In this segment cover is often arranged as a framework or group contract held by an umbrella association, a regional church or a sports federation, which individual clubs join. Check who is included. Some group contracts insure volunteers only and leave salaried staff out, others do the opposite.
What is covered
Accident damage to the private vehicle during an approved business trip, including damage the driver caused
Theft, fire, storm, hail and glass breakage during the trip
Collision with animals, game only or all animals depending on the wording
Total loss up to the replacement value of the vehicle
Loss of no-claims discount in the private liability policy, if that module is agreed
Vehicles of volunteers, board members and instructors, if they belong to the insured group
Towing and recovery after an insured loss, where agreed
Parking damage during work related stops, depending on the wording
What is not covered
The daily commute between home and the regular workplace
Private journeys and private detours during a business trip
Company cars and other vehicles owned by the policyholder
Intentional damage and driving under the influence of alcohol or drugs
Driving without a valid licence
Wear and tear and mechanical damage without an accident
Who needs it
German subsidiaries whose staff regularly drive their own cars to clients, sites or meetings
Care services, practices and social organisations with home visits by private car
Clubs and associations whose coaches, board members and helpers use their own vehicles
Churches, charities and municipal bodies with many volunteers
Companies without a fleet that reimburse travel through the mileage allowance
Who does not need it
Businesses whose staff travel only by company car, rental car or train
Clubs already fully insured through their umbrella association's framework contract
Wheel of misfortune
Spin the wheel of bad luck
Six things that really happen. The wheel picks yours and shows who pays.
Cost:
Budget policy Strong policy
See all six cases
Rear-end collision en route to a client, repair of the driver's own car, often several thousand euros. Budget policy: pays, Strong policy: pays. The core case. Comprehensive cover pays the repair less the excess, even if the driver caused the accident.
Private liability policy downgraded, extra premiums for years, €869 in the BAG case. Budget policy: does not pay, Strong policy: pays. The other party's loss is paid by the driver's private liability insurer. Only a contract with the discount module makes up the downgrade.
Parking scrape at the conference hotel, a few hundred to a few thousand euros. Budget policy: pays in part, Strong policy: pays. Whether parking during a trip of several days still counts as the business trip differs between wordings. Strong contracts say so expressly.
Accident on the daily commute, the full damage to the driver's own car. Budget policy: does not pay, Strong policy: does not pay. The daily commute is not a business trip. It remains the employee's risk and is excluded even in strong contracts.
Volunteer coach hits a deer, up to the value of the car. Budget policy: pays in part, Strong policy: pays. Game collision itself is partial cover. What matters is whether volunteers and instructors belong to the insured group at all.
Private detour to the DIY store, the full damage to the driver's own car. Budget policy: does not pay, Strong policy: pays in part. Private detours interrupt the business trip. Some contracts include work related detours, purely private errands never.
What it costs
The premium follows the amount of business driving, not the individual car. Contracts are priced per business kilometre, per travel day or as a flat annual premium for a defined group of people. Published framework tariffs that charge by distance are in the range of a few cents per kilometre, usually with a minimum premium.
What drives the premium
Business kilometres per year or number of travel days
Number and type of insured persons: employees, volunteers, board members
Excess for comprehensive and partial cover
No-claims discount module, with or without private comprehensive cover
Vehicle types insured, for example motorcycles or motorhomes
Claims history of the contract
We do not publish sample premiums because the only public rates come from framework contracts of individual associations and do not apply to other businesses. Your premium is fixed in the quotation.
The policy levels on the market
01
Day cover for single trips
Cover for individual travel days entered in advance. Suits clubs and businesses where private cars are used only occasionally. Forgetting to register a trip is the main risk.
02
Annual contract by kilometres
All business trips of the defined group are insured and the premium follows the kilometres declared. The usual route for businesses with regular travel and orderly expense reports.
03
Flat rate contract with discount protection
Fixed annual premium without naming drivers or cars, extended to loss of no-claims discount, parking damage and work related detours. For larger workforces and associations that do not want to keep trip lists.
How to recognise a good policy
Criterion
Minimum standard
Strong policy
Why it matters
Insured persons
employees on instructed business trips
also volunteers, board members, freelancers and vehicles owned by family members
The reimbursement claim hits the organisation whoever was driving.
No-claims discount
not included
liability and private comprehensive policy, over several years
The downgrade often costs more over time than the excess.
Excess
fixed amount per claim
selectable, low or none for partial cover
Whether the business or the driver bears it needs an internal rule.
Definition of business trip
direct route there and back
also work related detours, parking and trips over several days
Much of the damage happens in the hotel car park, not on the motorway.
Gross negligence
benefit reduced according to the degree of fault
defence waived, except for alcohol and drugs
Missing a red light happens quickly and otherwise ends in a dispute.
Relation to the private policy
pays only if no other insurance does
pays first, private comprehensive cover is left untouched
Otherwise the employee is downgraded in their own contract after all.
Declaration and proof
each vehicle named in advance
blanket cover, proof by expense report or travel order
A forgotten notification should not cost the cover.
Insurers on the German market
This is a small line in Germany, mostly written through framework and group contracts that are often administered by brokers for churches, charities and sport. The risk carriers below write such contracts according to publicly available documents. The list describes the German market; it says nothing about which insurers we work with.
Insurer
Background
ARAG
sports insurer of many regional sports federations, supplementary motor cover for clubs
Württembergische
motor insurer based in Stuttgart, risk carrier of business trip contracts for clubs and associations
Provinzial
public insurer of the savings banks group, framework contracts for public bodies
Baloise
German company of the Swiss Baloise group, formerly Basler
BGV
public insurer from Karlsruhe, contracts for municipalities and professional associations
From the BaFin register
106
106 insurers supervised by BaFin, the German regulator, are licensed for this class of insurance.
(Kraftfahrzeug-Kasko)
Show all 106 names from the register
ACM Versicherung AG
ADAC Autoversicherung AG
ADLER Versicherung AG
Allianz Direct Versicherungs-AG
Allianz Global Corporate & Specialty SE
Allianz Versicherungs-Aktiengesellschaft
Alte Leipziger Versicherung Aktiengesellschaft
Ambra Versicherung AG
andsafe Aktiengesellschaft
ARAG Allgemeine Versicherungs-Aktiengesellschaft
AXA easy Versicherung AG
AXA Versicherung Aktiengesellschaft
BA die Bayerische Allgemeine Versicherung AG
Badischer Gemeinde-Versicherungs-Verband
Baloise Sachversicherung Aktiengesellschaft Deutschland
The standard for businesses: every instructed trip in a private car is insured, priced by declared kilometres or a flat rate.
Day cover (Tageskasko)
Individual days are registered before the trip. Inexpensive for occasional travel, but only effective if registration is not forgotten.
No-claims discount insurance
Module or separate contract that makes up the extra premium after a downgrade in the driver's private policy.
Group contract of an association
Umbrella associations, regional churches and sports federations hold framework contracts that members join. Scope and insured persons are fixed.
Supplementary motor cover for clubs
Package of comprehensive cover, discount protection and often legal expenses for trips on club business, usually added to the sports insurance.
Myth or truth
True or false?
Five things people say about this insurance. Guess first, then see the answer.
The mileage allowance also pays for the accident.
This is false.
False. According to the BAG the allowance is not a special payment for the accident risk. The employer must reimburse the damage to the car on top.
The employer is liable even without fault.
This is true.
True. The claim by analogy with section 670 of the Civil Code needs no fault, only that the car was used in the employer's sphere of activity with approval.
With gross negligence the employer still pays everything.
This is false.
False. With gross negligence the claim against the employer usually lapses, with ordinary negligence the loss is shared.
The normal commute is not a business trip.
This is true.
True. The commute is the employee's own risk. The BAG has recognised an exception for journeys from on-call duty.
Volunteers always drive at their own risk.
This is false.
False. Someone driving on the club's instruction can claim reimbursement of expenses. Only a mere favour without a mandate leaves them empty handed.
Common mistakes
Relying on the mileage allowance and assuming accident damage is settled by it
Leaving volunteers and board members out of the insured group although they drive the most
Not instructing or documenting business trips, so proof is missing after a loss
Omitting discount protection and arguing about the downgrade after the first accident
Not deciding who bears the excess, the business or the driver
Frequently asked questions
Questions and answers
Frequently asked
What is business trip motor cover?
Comprehensive motor insurance that an employer or club takes out for private vehicles it does not
own.
It applies only during business trips and pays for damage to the employee's or volunteer's vehicle
without involving their private policy.
The German term is Dienstreisekaskoversicherung.
Is the employer really liable without fault?
Yes.
The Federal Labour Court applies section 670 of the Civil Code by analogy.
It is enough that the vehicle was used in the employer's sphere of activity with approval and that
the employee receives no special payment for the accident risk.
What if the employee caused the accident?
Then the claim is reduced under the German rules on limited employee liability.
With slight negligence the employer reimburses in full,
with ordinary negligence the loss is shared, with gross negligence the claim usually lapses.
The employee has to show that they did not act with gross negligence.
Does the mileage allowance already cover accidents?
No.
The allowance of €0.30 per kilometre covers running costs and, according to the BAG,
is not a special payment for the accident risk.
For the liability downgrade the court has in the past assumed that the allowance does settle it.
Is the commute a business trip?
Generally not, the commute is the employee's own matter.
The BAG made an exception for on-call duty:
an employee called in from on-call duty who could reasonably consider the private car necessary
can claim reimbursement (22 June 2011, 8 AZR 102/10).
What is loss of no-claims discount and who pays for it?
After an at-fault accident the driver's private motor insurer downgrades the no-claims class and
premiums rise for years.
The discount module makes up these extra premiums,
for liability only or also for private comprehensive cover depending on the contract.
Are volunteers in a club insured too?
Only if the contract names them.
Some wordings insure employees only, others expressly include volunteers,
board members and instructors.
With group contracts of associations,
read the information sheet to see who belongs to the insured group.
Is the mileage allowance reduced if the employer has this cover?
No.
The €0.30 per kilometre can still be reimbursed tax free in full even if the employer has taken
out business trip motor cover.
Can I get the documents in English?
Contracts and conditions in this line are issued in German and the German wording is binding.
We explain the key clauses in English and help you align them with your travel policy.
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