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Contractors all risks in Germany: who pays when the work is damaged before handover
Under German law the contractor carries the risk for his work until the client formally accepts it, and must rebuild at his own cost if it is destroyed. Bauleistungsversicherung, the German form of contractors all risks cover, pays for damage to the works from storm, heavy rain, vandalism, theft of installed parts or design errors. It is not compulsory, but many German clients require it in the building contract.
The question almost everyone asks first
Do I need my own contractors all risks policy if the client already has one?
Usually not, as long as the client's policy covers all trades and includes your work. That is standard with the client version under ABN terms, and the premium is then often deducted as a share from your final invoice. Check the deductible, because it is often charged to the contractor who caused the loss. If you regularly work on sites without such a policy, you need your own cover under ABU terms, usually as an annual policy for all projects.
Abnahme: the moment the risk passes
German construction law revolves around Abnahme, the formal acceptance of the work by the client. Until then, § 644 of the Civil Code (BGB) places the risk of accidental destruction on the contractor. If a finished wall is knocked down by vandals or blown over in a storm before Abnahme, the contractor rebuilds it without extra payment. Practical completion as known in UK contracts does not shift this risk.
Most German commercial building contracts incorporate the VOB/B, standard terms for construction work. § 7 VOB/B lets the contractor keep his right to payment for executed work destroyed by force majeure, war, riot or other objectively unavoidable events. Courts read this narrowly: ordinary bad weather, theft or vandalism on an unsecured site usually do not qualify, and § 4 (5) VOB/B obliges the contractor to protect his work against damage and theft until acceptance.
Client policy or contractor policy
A client policy under ABN terms covers the entire project and all contractors on site in one contract. That avoids the typical German site dispute over which trade caused the water damage in the screed. Clients frequently pass a share of the premium on to contractors through a deduction written into the contract.
A contractor policy under ABU terms covers only your own work. Firms with several sites at any time usually take an annual policy based on turnover, with a maximum sum per project, so no site starts uninsured.
Refurbishment and existing buildings
When you work on an existing building, the building itself is not part of the insured works. If rain enters through an opened roof and damages the flats below, that loss is covered only if the policy explicitly includes existing structures. For conversions and refurbishments this extension is often the most important part of the cover.
What it does not replace
Contractors all risks is property cover for the works. Damage your team causes to neighbouring buildings, utilities or passers-by falls under business liability insurance (Betriebshaftpflicht), which German clients also expect to see. Your own plant, scaffolding and site containers need machinery or equipment cover. Simply fixing a defect is not an insured loss; only damage the defect causes to other parts of the works is covered.
What is covered
- Sudden, unforeseen damage to the works before acceptance
- Storm, heavy rain and unusual weather that could not be foreseen
- Vandalism and malicious damage
- Theft of installed components
- Damage resulting from design, calculation and workmanship errors
- Negligence of anyone working on site
- Clean-up, demolition and debris removal as agreed
- Existing structures, where included
- Fire, lightning and explosion, where agreed
What is not covered
- Rectifying defects where nothing else is damaged
- Normal seasonal weather
- Theft of loose materials not yet installed, unless agreed
- Plant, scaffolding, containers and tools
- Third party liability and damage to neighbours
- Contract penalties, delay and acceleration costs
- Damage after acceptance
Who needs it
- Contractors and trades working on shell, roof, fit-out or civil engineering
- General contractors and developers responsible for the whole project
- Commercial clients who want all trades under one policy
- Foreign contractors taking on German projects whose clients ask for proof of cover
- Firms refurbishing or converting existing buildings
Who can do without
- Subcontractors on sites with a client policy covering all trades, if the deductible is manageable
- Design consultants without their own construction work; they need professional indemnity
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
- Storm flattens a freshly built wall, roughly €5,000 to €30,000. Budget policy: pays, Strong policy: pays. An unseasonal storm before Abnahme is a textbook claim. Without cover the contractor would rebuild at his own cost.
- Copper cable stripped from the shell, often four to five figures. Budget policy: pays in part, Strong policy: pays. Cable already installed is part of the works and covered. Loose drums on site are only covered where materials not yet installed are included.
- Vandals smash the new windows, four to five figures. Budget policy: pays, Strong policy: pays. Malicious damage by unknown persons is covered, and nobody has to be identified. German insurers do expect a police report.
- Rain pours through the opened roof, five figures per flat. Budget policy: does not pay, Strong policy: pays. The existing flats below are not part of the insured works. Only a policy that explicitly includes existing structures pays for them.
- Tiles laid crooked, all must come out, four to five figures. Budget policy: does not pay, Strong policy: does not pay. Nothing was destroyed, the work is simply defective. Putting it right is a warranty matter under German law, not an insured loss.
- Penalty for a three-week late handover, whatever the contract says. Budget policy: does not pay, Strong policy: does not pay. Delay penalties and acceleration costs are excluded in every German policy. They are contractual risks, not physical damage.
What it costs
The premium is a rate per mille of the contract value, or of annual construction turnover for annual policies, plus 19 percent German insurance tax. For single projects it is usually paid once for the whole construction period.
What drives the premium
- Type of construction: building, civil or structural engineering
- New build or work on existing buildings
- Contract value and duration
- Deductible
- Extensions such as existing structures, theft, fire, groundwater
- Flood exposure of the site
- Claims history for annual policies
Premiums are calculated per project or on turnover and there are no reliable public benchmarks, so we do not quote ranges. The actual premium is fixed in the offer.
The policy levels on the market
02
Annual contractor policy
All projects in a year up to a maximum sum per project, premium based on turnover.
03
Extended cover
Adds existing structures, theft of delivered materials, fire and groundwater. Useful for refurbishment, groundworks and exposed sites.
How to recognise a good policy
| Criterion | Minimum standard | Strong policy | Why it matters |
|---|---|---|---|
| Scope | own work only | all trades under ABN with waiver of recourse between them | One policy for everyone ends the argument about who caused the damage. |
| Existing structures | excluded | included with a separate sum | In conversions the damage to the existing building is often larger than to the new work. |
| Theft | installed parts only | delivered but uninstalled materials up to a limit | Windows, cables and heating equipment tend to disappear before they are fitted. |
| Fire | not included | included, with no gap to builders' fire cover | Otherwise the shell needs separate fire insurance. |
| Water | only exceptional flood events | clear cover for groundwater and open excavations | Water is the most common cause of loss in groundworks. |
| Deductible | high and flat | graded by trade, lower for vandalism | Many site losses are mid-sized and vanish entirely into a high deductible. |
| Annual policy | each site declared individually | automatic cover up to a maximum per project | A forgotten declaration is the most common gap for contractors. |
Insurers on the German market
In Germany contractors all risks is written mainly by property insurers with engineering departments. Some focus strongly on the construction industry.
| Insurer | Background |
|---|---|
| VHV | broker-focused insurer with a strong construction industry focus |
| Allianz | engineering lines for construction and trades |
| R+V | insurer of the German cooperative banks |
| AXA | commercial lines via agents and brokers |
| HDI | Talanx group, SMEs and construction trades |
| Zurich | commercial and industrial clients via brokers |
| Helvetia | engineering lines via brokers |
From the BaFin register
155
155 insurers supervised by BaFin, the German regulator, are licensed for this class of insurance. (Hagel-, Frost- und sonstige Sachschäden)
Show all 155 names from the register
- ACM Versicherung AG
- ADAC Autoversicherung AG
- ADAC Versicherung AG
- ADAC Zuhause Versicherung AG
- ADLER Versicherung AG
- Allianz Direct Versicherungs-AG
- Allianz Global Corporate & Specialty SE
- Allianz Versicherungs-Aktiengesellschaft
- Alte Leipziger Versicherung Aktiengesellschaft
- Ambra Versicherung AG
- AMMERLÄNDER VERSICHERUNG Versicherungsverein a.G. (VVaG)
- andsafe Aktiengesellschaft
- ARAG Allgemeine Versicherungs-Aktiengesellschaft
- Astra Versicherung AG
- AXA Versicherung Aktiengesellschaft
- BA die Bayerische Allgemeine Versicherung AG
- Badischer Gemeinde-Versicherungs-Verband
- Baloise Sachversicherung Aktiengesellschaft Deutschland
- Barmenia Allgemeine Versicherungs-Aktiengesellschaft
- BavariaDirekt Versicherung AG
- Bayerische Hausbesitzer-Versicherungs-Gesellschaft a.G.
- Bayerische Landesbrandversicherung Aktiengesellschaft
- Bayerischer Versicherungsverband Versicherungsaktiengesellschaft
- BD24 Berlin Direkt Versicherung AG
- Bergische Brandversicherung Allgemeine Feuerversicherung V.a.G.
- BGV-Versicherung Aktiengesellschaft
- CG Car-Garantie Versicherungs-Aktiengesellschaft
- Concordia Versicherungs-Gesellschaft auf Gegenseitigkeit
- CONSTANTIA Versicherungen a.G.
- Continentale Sachversicherung Aktiengesellschaft
- Cosmos Versicherung Aktiengesellschaft
- DA Deutsche Allgemeine Versicherung Aktiengesellschaft
- DARAG Deutschland AG
- Debeka Allgemeine Versicherung Aktiengesellschaft Sitz Koblenz am Rhein
- Delvag Versicherungs-AG
- DEVK Allgemeine Versicherungs-Aktiengesellschaft
- DEVK Deutsche Eisenbahn Versicherung Sach- und HUK-Versicherungsverein a.G. Betriebliche Sozialeinrichtung der Deutschen Bahn
- DFV Deutsche Familienversicherung AG
- Dialog Versicherung Aktiengesellschaft
- Die Haftpflichtkasse VVaG
- DOCURA VVaG
- Dolleruper Freie Brandgilde
- Domestic & General Insurance Europe AG
- ERGO Direkt Versicherung Aktiengesellschaft
- ERGO Reiseversicherung AG
- ERGO Versicherung Aktiengesellschaft
- EUROPA Versicherung Aktiengesellschaft
- EXTREMUS Versicherungs-Aktiengesellschaft
- Fahrlehrerversicherung Verein auf Gegenseitigkeit
- Feuer- und Einbruchschadenkasse der BBBank in Karlsruhe, Versicherungsverein auf Gegenseitigkeit
- Feuersozietät Berlin Brandenburg Versicherung Aktiengesellschaft
- GARANTA Versicherungs-Aktiengesellschaft
- Gartenbau-Versicherung VVaG
- Gebäudeversicherungsgilde für Föhr,Amrum und Halligen
- Generali Deutschland Versicherung AG
- GGG Kraftfahrzeug-Reparaturkosten-Versicherungs-Aktiengesellschaft
- Gothaer Allgemeine Versicherung Aktiengesellschaft
- Gothaer Versicherungsbank VVaG
- Great Lakes Insurance SE
- GRUNDEIGENTÜMER-VERSICHERUNG Versicherungsverein auf Gegenseitigkeit
- GVO Gegenseitigkeit Versicherung Oldenburg VVaG
- GVV Direktversicherung AG
- GVV-Kommunalversicherung, Versicherungsverein auf Gegenseitigkeit
- Hagelgilde Versicherungsverein a.G., gegründet 1811
- Hamburger Beamten-Feuer-und Einbruchskasse
- Hamburger Feuerkasse Versicherungs-Aktiengesellschaft
- Hamburger Lehrer-Feuerkasse
- HanseMerkur Allgemeine Versicherung AG
- HanseMerkur Reiseversicherung AG
- Harsewinkeler Versicherung VaG
- HDI Global SE
- HDI Global Specialty SE
- HDI Haftpflichtverband der Deutschen Industrie Versicherungsverein auf Gegenseitigkeit
- HDI Versicherung AG
- Helvetia Schweizerische Versicherungsgesellschaft AG Direktion für Deutschland
- Helvetia Versicherungs-Aktiengesellschaft
- HUK-COBURG Haftpflicht-Unterstützungs-Kasse kraftfahrender Beamter Deutschlands a.G. in Coburg
- HUK-COBURG-Allgemeine Versicherung AG
- HUK24 AG
- Häger Versicherungsverein auf Gegenseitigkeit
- Hübener Versicherungs-Aktiengesellschaft
- IDEAL Versicherung AG
- INTER Allgemeine Versicherung AG
- Interlloyd Versicherungs-Aktiengesellschaft
- InterRisk Versicherungs-AG Vienna Insurance Group.
- ISSELHORSTER Versicherung V.a.G.
- Itzehoer Versicherung/Brandgilde von 1691 Versicherungsverein auf Gegenseitigkeit
- Janitos Versicherung Aktiengesellschaft
- KRAVAG-ALLGEMEINE Versicherungs-Aktiengesellschaft
- KRAVAG-LOGISTIC Versicherungs-Aktiengesellschaft
- Landschaftliche Brandkasse Hannover
- LBN Versicherungsverein a.G. (VVaG)
- Lehrer-Feuerversicherungsverein a.G. für Schleswig-Holstein, Hamburg und Mecklenburg-Vorpommern
- Lifestyle Protection AG
- Lippische Landesbrandversicherung AG
- Lucura Versicherungs AG
- LVM Landwirtschaftlicher Versicherungsverein Münster a.G.
- Mannheimer Versicherung Aktiengesellschaft
- Markel Insurance SE
- Mecklenburgische Versicherungs-Gesellschaft auf Gegenseitigkeit
- Mercedes-Benz Versicherung AG
- MVK Versicherung VVaG
- MÜNCHENER VEREIN Allgemeine Versicherungs-AG
- NEH Neue Hildener Versicherung AG
- Neodigital Versicherung AG
- Neuendorfer Brand-Bau-Gilde
- Newline Europe Versicherung AG
- nexible Versicherung AG
- Nordhemmer Versicherungsverein auf Gegenseitigkeit
- NV-Versicherungen VVaG
- NÜRNBERGER Allgemeine Versicherungs-Aktiengesellschaft
- NÜRNBERGER BEAMTEN ALLGEMEINE VERSICHERUNG AKTIENGESELLSCHAFT
- OKV - Ostdeutsche Kommunalversicherung auf Gegenseitigkeit
- Ostangler Brandgilde, Versicherungsverein auf Gegenseitigkeit (VVaG)
- OSTBEVERNER Versicherungsverein auf Gegenseitigkeit (VVaG)
- Pallas Versicherung Aktiengesellschaft
- ProTect Versicherung AG
- Provinzial Nord Brandkasse Aktiengesellschaft
- Provinzial Versicherung Aktiengesellschaft
- PVAG Polizeiversicherungs-Aktiengesellschaft
- R+V Allgemeine Versicherung Aktiengesellschaft
- Real Garant Versicherung Aktiengesellschaft
- RheinLand Versicherungs Aktiengesellschaft
- Rhion Versicherung Aktiengesellschaft
- S DirektVersicherung Aktiengesellschaft
- SAARLAND Feuerversicherung Aktiengesellschaft
- Schleswiger Versicherungsverein auf Gegenseitigkeit
- SCHNEVERDINGER Versicherungsverein a.G.
- SHB Allgemeine Versicherung VVaG
- SIGNAL IDUNA Allgemeine Versicherung Aktiengesellschaft
- SIGNAL IDUNA Unfallversicherung a. G.
- Sparkassen-Versicherung Sachsen Allgemeine Versicherung Aktiengesellschaft
- Stuttgarter Versicherung Aktiengesellschaft
- SV SparkassenVersicherung Gebäudeversicherung Aktiengesellschaft
- TRIAS Versicherung Aktiengesellschaft
- Uelzener Allgemeine Versicherungs-Gesellschaft a.G.
- Union Reiseversicherung Aktiengesellschaft
- uniVersa Allgemeine Versicherung AG
- Vereinigte Hagelversicherung VVaG
- Vereinigte Tierversicherung, Gesellschaft auf Gegenseitigkeit
- Versicherer im Raum der Kirchen Sachversicherung AG
- Versicherungsverband Deutscher Eisenbahnen-Versicherungsverein auf Gegenseitigkeit
- VHV Allgemeine Versicherung AG
- Volkswagen Versicherung Aktiengesellschaft
- VOLKSWOHL-BUND SACHVERSICHERUNG AKTIENGESELLSCHAFT
- VPV Allgemeine Versicherungs-AG
- Waldenburger Versicherung Aktiengesellschaft
- WERTGARANTIE SE
- WGV-Versicherung AG
- WWK Allgemeine Versicherung Aktiengesellschaft
- Württembergische Gemeinde-Versicherung auf Gegenseitigkeit
- Württembergische Versicherung Aktiengesellschaft
- Würzburger Versicherungs-AG
- Zurich Insurance Europe AG
- Öffentliche Feuerversicherung Sachsen-Anhalt
Source: BaFin company database, retrieved 18 September 2026. Insurers from other EU countries selling through a branch or without a German office are not included.
Legal basis and sources
Products and add-ons
Client policy (ABN)
One policy for the whole project and all trades, taken out by the client.
Contractor policy (ABU)
Covers only the contractor's own work, per project or annually.
Builders' fire insurance
Fire, lightning and explosion during construction. For residential buildings often included free in the later buildings policy.
Erection all risks
For lifts, ventilation, solar and other technical plant during installation.
Business liability
Covers damage to third parties, which contractors all risks does not.
Myth or truth
True or false?
Five things people say about this insurance. Guess first, then see the answer.
German contractors all risks cover includes third party liability, as it often does abroad.
This is false.
No. Many international CAR policies have a third party liability section, but the German Bauleistungsversicherung covers the works only. Liability to neighbours and passers-by needs Betriebshaftpflicht.
Fire damage to the works is always part of the German policy.
This is false.
Not by default. Fire, lightning and explosion must be agreed. Many clients insure fire during construction through their building insurance, which often includes it free for the build period.
Damage caused by an engineer's calculation error can be covered.
This is true.
True. Physical damage resulting from design and calculation errors is covered. The corrected design itself is not; that is the engineer's liability.
Scaffolding and site containers are insured along with the works.
This is false.
No. The policy covers the building under construction. Scaffolding, containers and plant need their own machinery or equipment cover.
A freak summer cloudburst can be covered even though summer rain is normal.
This is true.
True. What counts is whether the intensity was unusual, not the season. Data from Germany's national weather service (DWD) is the usual evidence in a claim.
Common mistakes
- Treating practical completion as the end of your risk instead of formal Abnahme
- Relying on § 7 VOB/B for theft or ordinary storms
- Working on existing buildings without including them
- Accepting the client's premium deduction without knowing the deductible
- Bringing a home country policy that does not cover German sites or German law
Questions and answers
Frequently asked
Is contractors all risks insurance compulsory in Germany?
No. Many clients, public bodies and general contractors require it in the building contract, so without it you may not get the job.
What is Abnahme and why does it matter for insurance?
Abnahme is the formal acceptance of the work by the client. It transfers the risk of damage from contractor to client and starts the warranty period. Your contractors all risks cover ends with it.
Is theft from a construction site covered?
Installed components, yes. Materials delivered but not yet installed only if the policy includes them. Tools and machines are never part of the works.
How much does contractors all risks insurance cost in Germany?
It is a rate per mille of the contract value or annual turnover, plus 19 percent insurance tax. Type of work, existing structures, deductible and extensions drive the rate.
Does it pay for construction defects?
No. Putting a defect right is a warranty matter. The policy pays for damage the defect causes to other parts of the works, for example a collapsing slab that takes walls with it.
Another trade damaged my work. Who pays?
If there is a client policy for all trades, it pays and usually waives recourse. Otherwise you must claim against the other firm's liability insurer, which often fails for lack of proof.
Can the client deduct the premium from my invoice?
Only if the building contract says so. It is common practice in Germany, and in return your work is covered under the client's policy. Ask for the wording and the deductible.
Can I use my UK or other foreign policy for a German project?
Only if it expressly covers sites in Germany and meets the client's contract requirements. Many clients want a policy on German terms, and German insurance tax applies to German risks.
Do I need a new policy for every site?
Not with an annual contractor policy. It covers all projects up to a maximum sum per project and is settled on turnover. Larger projects are declared separately.
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