Does business interruption insurance pay if the owner is ill?
In short
Standard business interruption insurance in Germany does not pay if the owner is ill, because it needs physical damage such as fire. For your own illness there is a separate policy, often called owner or practice absence insurance (Betriebsausfall or Praxisausfallversicherung). It pays fixed costs after a waiting period, for example about EUR 850 a year for a EUR 50,000 sum.
Published examples for cover against the owner's absence, with a property based policy for comparison.
Example
Typical range
Physiotherapy practice, owner plus 2 full time staff, sum EUR 50,000, 21 days waiting, 12 months
about EUR 850 a year
Dental group practice, daily rate EUR 880
about EUR 1,500 to 2,500 a year
For comparison: small business interruption add-on, restaurant, EUR 100,000
about EUR 109 a year, no illness cover
As of October 2026, from published examples.
Age, health, profession, waiting period and sum change the premium a lot;
we can get you an exact quote.
Worked example
Physiotherapist, ill for six weeks
Owner absence cover with a EUR 50,000 sum and 21 days waiting period, owner off work for 42 days after a slipped disc.
Daily rate (EUR 50,000 divided by 365)
around EUR 137
Days ill
42
Waiting period without payment
21 days
Days paid
21
The insurer pays around EUR 2,880. The practice carries the first three weeks of fixed costs; a shorter waiting period costs more.
Two products with almost the same name
In German, Betriebsunterbrechung and Betriebsausfall sound alike but cover different risks. Business interruption insurance in the narrow sense pays when fire, water, storm or burglary stops your business. A slipped disc, a heart attack or a long flu of the owner is not physical damage, so it does not pay.
Owner absence insurance covers the person: if the owner is unable to work, it pays the costs that can no longer be earned. Many policies combine both, so what matters is the list of insured perils in your contract, not the product name.
Feature
Business interruption
Owner absence cover
Trigger
fire, water, storm, burglary
illness or accident of the owner
Pays
profit and continuing costs
continuing costs, sometimes profit
Waiting time
hours to a few days
set by the policy, 21 days in the example
Health questions
no
yes
Tax in Germany
business expense, payout taxable
private, payout not taxed
Who needs owner absence cover
If your business stops without you because you treat patients, advise clients, design or work on site yourself, your ability to work is the biggest risk. That applies to medical and therapy practices, law firms, engineering offices and small trades.
If a second manager or a locum can step in, the need is smaller. Cover for replacement costs or a longer waiting period may then be enough.
What it pays if the owner is ill
The sum insured usually equals one year of continuing costs, in some policies plus profit. After the waiting period the insurer pays a daily rate, the annual sum divided by 365, for as long as the owner is ill, but no longer than the indemnity period, usually twelve months.
Many policies already pay for partial inability to work, from 50 to 70 percent depending on the insurer. Planned surgery and health conditions not disclosed in the application are common points of dispute.
Not the same as sick pay or disability cover
Daily sickness benefit (Krankentagegeld) replaces your private income for rent, food and family. Owner absence insurance pays the costs of the business. With sickness benefit alone, you pay staff and premises from money meant for your household.
Disability insurance (Berufsunfähigkeitsversicherung) pays only if you are expected to be unable to work for a long time. It is not designed for a few weeks or months of illness.
When you do not need it
Without staff, rented premises or leasing, there are hardly any continuing business costs. A freelancer working from home is then better served by daily sickness benefit than by owner absence cover.
With savings covering six months of fixed costs, you can choose a long waiting period or skip it and put the premium aside.
Step by step
Check whether your policy names illness and accident of the owner as insured perils.
Add up monthly fixed costs: salaries, rent, leasing, loans, insurance.
Choose the waiting period based on your savings.
Answer the health questions fully and truthfully.
Align it with daily sickness benefit so business and household are covered separately.
Checklist
Illness and accident of the owner explicitly covered
Sum covers one year of continuing costs
Waiting period matches your savings
Payment also for partial inability to work
Quarantine and physical damage included if wanted
Insurer waives cancellation after a claim
Common mistakes
Thinking the business interruption add-on pays when the owner is ill
Relying on sickness benefit to pay practice costs
Leaving out health conditions in the application
Not raising the sum after hiring staff
Questions and answers
Frequently asked
Does it pay for burnout or depression?
In principle yes, if a doctor certifies inability to work.
Some policies exclude or limit mental illness, so check the terms.
Does it pay if an employee is ill?
Usually not, the owner is the insured person.
Some policies pay a few days if the whole team is off at once.
How long does it pay?
Until you can work again, at most until the indemnity period ends, usually twelve months.
Up to what age can I apply?
Each policy sets its own age limit, so ask for it in the quote.
The younger and healthier you are, the lower the premium.
Is the payout taxable?
If the policy only covers the owner's illness,
premiums are not business expenses in Germany and the payout is not taxed.
