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Product section of business liability
Injury and property damage caused by delivered products, Germany and Europe. Enough for resellers and makers of goods that are not built into anything else.
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Product liability insurance in Germany: cover for what happens after delivery
If you manufacture goods, sell them under your own brand or import them into the EU, German law holds you liable for defects without any need to prove fault. Product liability cover pays for injury and property damage. Extended product liability adds the financial losses of your business customers, such as the cost of removing and replacing faulty parts. A recall is a separate risk with its own cover.
The question almost everyone asks first
Do I need separate product liability insurance if I already have business liability cover?
Usually product liability is a section of the German business liability policy rather than a contract of its own. That basic section covers injury and property damage caused by products after delivery. What really hurts suppliers, though, are the financial losses of their customers: parts that have to be taken out again, finished goods that are ruined, inspection and sorting costs. Only extended product liability (erweiterte Produkthaftpflicht) covers those, and it must be agreed expressly. Recall costs need a further module.
Strict liability under the German Product Liability Act
Under the Produkthaftungsgesetz a manufacturer is liable for damage caused by a defective product without the injured party having to prove negligence. The law treats as manufacturer anyone who puts their name or trademark on the product and anyone who imports goods into the European Union for distribution. If none of them can be identified, the reseller becomes liable unless it names its own supplier within one month.
Under the current act, claimants bear the first EUR 500 of any property damage, only property in private use is compensated, and personal injury from a series defect is capped at EUR 85 million. Claims become time barred three years after the claimant learns of the damage and expire ten years after the product was put into circulation. Alongside sits fault based liability under § 823 of the Civil Code, which has none of these limits and also covers business property.
The new German law from December 2026
The EU rewrote its product liability rules in Directive (EU) 2024/2853, and the Bundestag passed the German implementing act on 8 October 2026. It applies to products placed on the market or put into service from 9 December 2026. Older products remain under the old act, so a business will carry both regimes for years.
The changes that matter for insurance: software, including AI systems, is now expressly a product. The EUR 500 threshold and the EUR 85 million cap are abolished. Loss of data used for private purposes becomes compensable. If you supply software, connected devices or digital components, check whether your policy actually describes them as insured products.
Extended product liability for suppliers
When a supplier ships a faulty component, the big loss rarely comes from an accident. It comes from the customer having built the part in, mixed it with other materials or processed it further, and now having to strip it all out, test it or scrap it. Those are pure financial losses outside the basic cover.
The model wording of the German insurers' association splits extended cover into modules: combining, mixing and processing; further processing; removal and installation costs; machines built with defective parts; and inspection and sorting costs, which apply only if named in the policy schedule. Since 2018 a seller of defective goods must reimburse the buyer's removal and installation costs (§ 439(3) BGB) and can claim them back from its own supplier (§ 445a BGB), so the claim travels up the chain to the manufacturer.
Recalls under the EU product safety rules
Since 13 December 2024 the EU General Product Safety Regulation (Regulation (EU) 2023/988) has applied. If a consumer product has to be recalled, the economic operator reports it through the EU Safety Business Gateway, informs affected buyers directly and offers them a remedy such as repair, replacement or a refund.
The costs of doing so, from notices and shipping to replacement and disposal, are normally not covered by product liability insurance. German insurers offer recall cost insurance for manufacturers and distributors for this purpose. Many modules only pay for recalling your own goods from end customers; whether a recall by a business customer that has built your part into its product is included needs to be settled before you buy.
Exports to the United States and Canada
Almost every German product liability policy excludes claims under US and Canadian law unless agreed specifically. This is not only about direct exports: a part that a German customer builds into a machine bound for America can lead to a lawsuit there. Every known route to North America, direct or indirect, belongs in the application.
Punitive damages are normally excluded by the policy wording, and such awards cannot be enforced in Germany anyway. Compensatory damages from a US judgment, on the other hand, can be enforced. Export cover costs extra premium and usually comes with its own limits and deductibles, which only a quote can settle.
What is covered
- Bodily injury and property damage caused by defective products after delivery
- Liability under the Product Liability Act and § 823 BGB
- Defence against unfounded claims, in court if necessary
- Combining, mixing and processing losses, if extended cover is agreed
- Further processing losses at the customer, if included
- Removal and installation costs for faulty parts, if included
- Inspection and sorting costs on suspicion of a defect, only if agreed expressly
- Claims under US or Canadian law, only with export cover
What is not covered
- Costs of a recall, notices and exchange, which need recall cost insurance
- Repair, redelivery or credit for your own defective product
- Damage to the product itself
- Contractual penalties, warranties and liability promises beyond the law
- Punitive damages under US law
- Products knowingly delivered in breach of law, standards or customer specifications
- Products not described in the policy, such as software added later
Who needs it
- Manufacturers of components, machinery and consumer goods
- Suppliers whose parts are installed or processed by their customers
- Retailers and online sellers with their own brand
- Importers bringing goods into the EU from elsewhere
- Providers of software, connected devices and digital components under the new law
- Exporters with goods reaching North America, including through customers
Who does not need it
- Pure resellers of third party brands sourced in the EU, who can always name their supplier, usually need only the basic product section of their business liability
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
- Fan heater sets a flat on fire, often five or six figures. Budget policy: pays, Strong policy: pays. Property damage at a consumer's home caused by a defective product is the core case. The basic cover pays where the manufacturer is liable.
- Leaking valves must come out, removal often many times the part price. Budget policy: does not pay, Strong policy: pays. The customer installed the valves and claims removal and installation costs. That financial loss is covered only by extended product liability.
- Wrong granulate ruins a batch, value of the spoiled end products. Budget policy: does not pay, Strong policy: pays. The customer mixed and processed the material and the result is scrap. Covered by the combining, mixing and processing module.
- Suspicion: check every delivery, labour hours at the customer. Budget policy: does not pay, Strong policy: pays in part. Inspection and sorting costs are insured only if named in the policy schedule, often with a sublimit.
- Recall of every charger sold, notices, shipping, replacements. Budget policy: does not pay, Strong policy: does not pay. No product liability policy pays the recall itself. That needs separate recall cost insurance.
- Lawsuit in Texas after an accident, defence and damages. Budget policy: does not pay, Strong policy: pays in part. Without agreed export cover, US claims are excluded. With it, compensatory damages are covered, punitive damages usually stay out.
What it costs
Premiums are based on turnover from the insured products and, above all, on what those products are. A maker of brake components is rated very differently from a textile reseller. Export share, especially to North America, and the extended modules drive the price far more than the limit itself.
What drives the premium
- Type and use of the products, for example safety relevant parts
- Turnover from the insured products
- Role in the supply chain: manufacturer, supplier, importer or reseller
- Share of exports and destination countries, especially the US and Canada
- Extended product liability and recall modules included
- Quality assurance, certification and claims history
There are hardly any published premium examples for product liability, and those that exist say nothing about a different product. We therefore quote no figures here. Your premium is fixed only in the quote we obtain with your product description and turnover split.
The policy levels on the market
02
Extended product liability
Adds customers' financial losses: combining and mixing, further processing, removal and installation, optionally inspection and sorting. The standard for suppliers.
03
Extended with recall and export
Adds recall cost insurance and cover for the US and Canada with separate limits. For series manufacturers and businesses with North American sales.
How to recognise a good policy
| Criterion | Minimum standard | Strong policy | Why it matters |
|---|---|---|---|
| Product description | all current products named | products, intended use and customer sectors described, automatic cover for new products | Only what is described in the policy is insured. A new product not reported can be uninsured. |
| Limit of indemnity | EUR 3 million combined | EUR 5 to 10 million plus a separate limit for extended cover | A series defect hits many customers at once and counts as a single loss. |
| Removal and installation costs | included with a sublimit | included, also for costs at your customer's own customers | Since 2018 these costs are passed up the chain to the manufacturer under §§ 439 and 445a BGB. |
| Inspection and sorting costs | not included | agreed expressly, also on suspicion without a proven defect | A whole batch often has to be checked before anyone knows which parts are faulty. |
| Recall costs | not included | separate module covering your own and third party recalls | The product safety regulation requires a remedy for every buyer, at the economic operator's expense. |
| Software and digital components | named in the policy's product definition | software, updates and data loss expressly included | Under the new act, software is a product like any physical good. |
| Territorial scope | Europe | worldwide, US and Canada with their own limit, including indirect exports | Parts travel through customers to countries you never shipped to yourself. |
| Run off cover | for products delivered during the policy period | extended run off after the policy ends or the business closes | A claim may arise years after delivery. |
Insurers on the German market
All large German commercial insurers write product liability, usually as part of business liability. For industry, suppliers and exporters, specialty and industrial insurers join them. The list describes the German market and says nothing about which insurers we work with.
| Insurer | Background |
|---|---|
| HDI Global | industrial insurer of the Talanx group, Hanover |
| HDI | Talanx company for small and mid sized business |
| Allianz | commercial clients through agents and brokers |
| AXA | small business and mid market through agents and brokers |
| R+V | insurer of the German cooperative banking group |
| Zurich | commercial and industrial lines, based in Frankfurt |
| Markel | specialty insurer in Munich, brokers only |
| Haftpflichtkasse | liability specialist, sold through brokers |
| Gothaer | commercial clients through agents and brokers |
Compare the wordings of all tariffs Product liability 27 tariffs from 14 providers, as of 24 October 2026
From the BaFin register
127
127 insurers supervised by BaFin, the German regulator, are licensed for this class of insurance.
(Allgemeine Haftpflicht)
Show all 127 names from the register
- ADAC Versicherung AG
- ADLER Versicherung AG
- AGILA Haustierversicherung Aktiengesellschaft
- Allcura Versicherungs-Aktiengesellschaft
- 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
- 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.
- Bayerischer Versicherungsverband Versicherungsaktiengesellschaft
- BD24 Berlin Direkt Versicherung AG
- BGV-Versicherung Aktiengesellschaft
- Concordia Versicherungs-Gesellschaft auf Gegenseitigkeit
- 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…
- DFV Deutsche Familienversicherung AG
- Dialog Versicherung Aktiengesellschaft
- Die Haftpflichtkasse VVaG
- DOCURA VVaG
- ERGO Direkt Versicherung Aktiengesellschaft
- ERGO Reiseversicherung AG
- ERGO Versicherung Aktiengesellschaft
- Euro-Aviation Versicherungs-Aktiengesellschaft
- EUROPA Versicherung Aktiengesellschaft
- Fahrlehrerversicherung Verein auf Gegenseitigkeit
- Feuersozietät Berlin Brandenburg Versicherung Aktiengesellschaft
- GARANTA Versicherungs-Aktiengesellschaft
- Gemeinnützige Haftpflichtversicherungsanstalt Kassel
- Generali Deutschland Versicherung AG
- 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
- Haftpflichtgemeinschaft Deutscher Nahverkehrs- und Versorgungsunternehmen Allgemein (HDNA) VVaG
- Hamburger Feuerkasse Versicherungs-Aktiengesellschaft
- HanseMerkur Allgemeine Versicherung AG
- HanseMerkur Reiseversicherung AG
- 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
- 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-LOGISTIC Versicherungs-Aktiengesellschaft
- Landschaftliche Brandkasse Hannover
- LBN Versicherungsverein a.G. (VVaG)
- 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
- MVK Versicherung VVaG
- MÜNCHENER VEREIN Allgemeine Versicherungs-AG
- Neodigital Versicherung AG
- Newline Europe Versicherung AG
- nexible Versicherung AG
- NV-Versicherungen VVaG
- NÜRNBERGER Allgemeine Versicherungs-Aktiengesellschaft
- NÜRNBERGER BEAMTEN ALLGEMEINE VERSICHERUNG AKTIENGESELLSCHAFT
- OKV - Ostdeutsche Kommunalversicherung auf Gegenseitigkeit
- Ostangler Brandgilde, Versicherungsverein auf Gegenseitigkeit (VVaG)
- Pallas Versicherung Aktiengesellschaft
- Provinzial Nord Brandkasse Aktiengesellschaft
- Provinzial Versicherung Aktiengesellschaft
- PVAG Polizeiversicherungs-Aktiengesellschaft
- R+V Allgemeine Versicherung Aktiengesellschaft
- RheinLand Versicherungs Aktiengesellschaft
- Rhion Versicherung Aktiengesellschaft
- S DirektVersicherung Aktiengesellschaft
- SAARLAND Feuerversicherung Aktiengesellschaft
- SHB Allgemeine Versicherung VVaG
- SIGNAL IDUNA Allgemeine Versicherung Aktiengesellschaft
- 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
- Versicherer im Raum der Kirchen Sachversicherung AG
- Versicherungskammer Bayern Versicherungsanstalt des öffentlichen Rechts
- Versicherungsverband Deutscher Eisenbahnen-Versicherungsverein auf Gegenseitigkeit
- Verti Versicherung AG
- VHV Allgemeine Versicherung AG
- VHV Vereinigte Hannoversche Versicherung a.G.
- VOLKSWOHL-BUND SACHVERSICHERUNG AKTIENGESELLSCHAFT
- VPV Allgemeine Versicherungs-AG
- Waldenburger Versicherung Aktiengesellschaft
- 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, 18 September 2026; EU insurers without a German office excluded.
Legal basis and sources
Products and add-ons
Product section of business liability
Part of the business liability policy covering injury and property damage from delivered goods. Sufficient for resellers and simple products.
Extended product liability
Adds the financial losses of business customers under the industry model wording. For suppliers and makers of parts that are installed or processed.
Recall cost insurance
Pays the costs of a recall, depending on the policy from end customers only or also from business customers. A module or a policy of its own.
US and Canada export cover
Adds North American claims with their own limit and deductible. Without it, even indirect exports remain an open risk.
Industrial liability programme
Tailored contract for larger manufacturers, often with an international programme and local policies in sales countries.
Myth or truth
True or false?
Five things people say about this insurance. Guess first, then see the answer.
A reseller is never liable for the manufacturer's defects.
This is false.
Wrong. Own brand sellers and importers into the EU count as manufacturers, and a reseller who cannot name its supplier within one month is liable as a fallback.
Under the German Product Liability Act the claimant has to prove negligence in the factory.
This is false.
Wrong. Liability is strict. The claimant has to show the defect, the damage and the causal link, not what went wrong in production.
Product liability insurance pays for a recall.
This is false.
Wrong. Recall costs are normally excluded and need a module of their own.
From December 2026, pure software can be a defective product in Germany.
This is true.
True. The new act expressly includes software for everything placed on the market from 9 December 2026.
Punitive damages from a US judgment cannot be enforced in Germany.
This is true.
True. Compensatory damages from a US judgment generally can be enforced, which is why export cover still matters.
Common mistakes
- Not reporting new products or software and finding them uninsured after a claim
- Assuming business liability pays your customer's removal and installation costs
- Believing a recall is covered because product liability is in place
- Overlooking indirect exports to North America through customers
- Signing supply contracts with liability promises beyond the law
- Assuming, as an importer, that the manufacturer in Asia carries the liability
- Not discussing the switch to the new product liability law in December 2026 with the insurer
Frequently asked questions
Questions and answers
Frequently asked
What is the difference between business and product liability?
Business liability covers damage from ongoing operations, such as work at a client's premises.
Product liability covers damage a product causes after delivery.
In Germany it is usually a section of the business liability policy,
while extended product liability has to be added separately.
Am I liable as a reseller for defective products?
Under the Product Liability Act only as a fallback,
if the manufacturer cannot be identified and you do not name your supplier within one month.
If you sell under your own brand or import from outside the EU, you count as the manufacturer.
Separately, you are liable to your buyer under the sales contract,
including removal and installation costs.
Does product liability insurance pay for a recall?
No.
Recall costs are normally excluded.
Recall cost insurance covers them, either as a module or a separate policy.
The key question is whether it covers only recalls from your end customers or also from business
customers.
What does the new German product liability act change for my insurance?
For products placed on the market from 9 December 2026, software counts as a product,
the EUR 500 threshold and the EUR 85 million cap are abolished,
and loss of privately used data is compensated.
Check that your policy describes digital products and that the limit still fits.
What are removal and installation costs?
If a customer has installed a defective part, such as tiles, a pump or a control unit,
it has to be removed and a sound one fitted.
That work often costs many times the price of the part.
The seller must reimburse it and can pass the claim back to its supplier,
so it ends up with the manufacturer.
I import goods from China into Germany. Am I covered?
Whoever imports goods into the EU is liable like a manufacturer.
Your policy must cover that role expressly.
Recovering from a manufacturer outside the EU often fails in practice,
so your own insurer frequently ends up paying.
Why do German policies exclude the US?
Because liability exposure there is assessed differently: jury trials,
high litigation costs and punitive damages.
Insurers cover North American claims only by agreement and on their own terms,
and punitive damages usually stay excluded even then.
How long after delivery can a claim arrive?
Under the current act, a claim expires ten years after the product was put into circulation and is
time barred three years after the claimant learns of the damage and the manufacturer.
Fault based liability under the Civil Code has its own periods.
That is why run off cover after the policy ends matters.
Is damage to my own product covered?
No.
Replacing or repairing the defective product itself is a warranty matter.
What is insured is the damage the product causes to other property and people,
and under extended cover the financial losses of your customers.
How does a broker help with product liability?
By describing your products and your role in the supply chain accurately,
checking the policy against your supply contracts and working out which modules your customers
actually expect from you.
When a claim comes in, we stand on your side with the insurer, in English if you prefer.
NAMMERT insurance broker
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