All about this insurance: Business liability
Is business liability insurance compulsory in Germany?
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What damage does business liability insurance cover?
In short
What damage does it cover? Business liability insurance pays for injury, property damage and the financial losses that follow from them when you, your staff or your business harm others. It also checks whether a claim is justified and defends you against unjustified claims at its own cost. Defects in your own work and pure financial losses are not covered.
What it costs
Published guide values for the annual premium with basic cover in Germany, 2026.
| Example | Typical range |
|---|---|
| Office, consulting, administration | about EUR 60 to 120 a year |
| Retail, small shop | about EUR 120 to 250 a year |
| Trades, standard work | about EUR 200 to 450 a year |
| Hotel with around 10 employees | about EUR 500 to 2,000 a year |
| Construction, roofing, scaffolding | from about EUR 600 a year |
Guide values from publicly quoted examples.
Add-ons such as damage to worked items cost a noticeable surcharge depending on trade and sublimit; that is a guide value from our quoting practice.
Your premium depends on trade, turnover and add-ons; we obtain the exact quote for you.
Worked example
Painting firm, one incident, three parts
A painter leaves a paint bucket in a client's stairwell, a resident trips over it and the paint spills onto the carpet of the doctor's practice on the ground floor.
| Bodily injury: treatment and compensation for pain | covered |
| Property damage: new carpet for the practice | covered |
| Resulting financial loss: practice closed for two days | covered |
| Paint runs down the wall the firm is painting | only with cover for damage to worked items |
| Repainting because the work was poor | not covered |
Basic cover pays three of the five items. The fourth only with the add-on, the fifth the firm carries itself as warranty.
The three kinds of loss in basic cover
Bodily injury: a customer slips on a wet floor in your shop and breaks a wrist. The policy pays treatment, compensation for pain and suffering, lost earnings and in the worst case a lifelong pension. That is why limits are so high.
Property damage: your employee knocks over a vase at a client's home or damages a glass door with a hand truck. The insurer pays the current value or the repair.
Resulting financial loss: because the glass door is broken, the client has to close the shop for a day. The lost turnover follows from the property damage and is therefore covered.
| Example | Covered by basic cover? |
|---|---|
| Customer trips over a cable in your workshop | yes, bodily injury |
| Ladder falls onto the client's parquet | usually yes, property damage |
| Client's downtime because of that damage | yes, resulting financial loss |
| Your work is faulty and has to be redone | no, that is your contractual duty |
| Wall breaks while drilling at the spot you work on | only with cover for damage to worked items |
| Wrong advice costs the client money without anything being damaged | no, pure financial loss |
Defence cover is often underrated
Not every claim is justified. The insurer first checks whether you are liable at all and for how much. If the claim is unfounded or too high, it defends you and pays lawyers, court fees and experts.
That can be worth more than the payout itself. A dispute over an alleged water damage quickly costs several thousand euros, even if you win in the end.
Add-ons that extend the cover
What business liability covers is set out in the policy wording and the schedule. Basic cover follows the same model terms at many German insurers; the differences lie in the extensions.
For trades and on site services the most important add-on is damage to items you work on (Tätigkeitsschäden). Other add-ons cover rented premises, lost third party keys, loading and unloading, environmental and water pollution damage and product liability for goods you make or supply.
| Add-on | Important for |
|---|---|
| Damage to items you work on | trades, installation, cleaning, workshops |
| Damage to rented premises | anyone renting a shop, office or warehouse |
| Lost keys | caretakers, cleaning, care services, trades |
| Environment and water | businesses with oil, solvents or a heating oil tank |
| Product liability | manufacturers, retailers with own brands, importers |
| Claims abroad | installation or delivery outside Germany |
When basic cover is enough
An office without customer visits that makes nothing and does not work at clients' premises usually needs no expensive add-ons. Basic cover with damage to the rented office is enough there.
If you mainly advise, plan or write code, your risk is different: mistakes cost the client money without anything breaking. Business liability does not cover that; you need financial loss or professional liability insurance.
Step by step
- Write down where you work: on your premises, at clients, on building sites, abroad.
- Check whether you work on, rent or borrow other people's things or receive their keys.
- Look up in the schedule which add-ons are included and up to which amount.
- Close gaps with the right add-ons, not with a higher overall limit.
- Insure pure financial loss from advice separately if you advise or plan.
Checklist
- Combined limit of at least EUR 3 million
- All activities of your business described in the policy
- Damage to worked items included if you work at clients' premises
- Damage to rented business premises included
- Lost keys with a sufficient limit if you hold other people's keys
- Product liability if you make or supply goods
Common mistakes
- Believing the insurance also pays for your own faulty work
- Looking only at the overall limit and missing the sublimits of add-ons
- Taking on a new activity without reporting it
- Trying to cover advice errors with business liability
Questions and answers
Frequently asked
Does business liability pay for damage caused by employees?
Yes. Damage your employees cause to others while working for you is covered. Their personal liability is included as well.
Does it pay for damage to my own business?
No. Your own machines, stock and premises need contents or buildings insurance. Liability insurance only pays what you owe others.
Are claims abroad covered?
Often for temporary stays in Europe, but installation or delivery to other countries usually needs an extension. Check the clause on foreign claims.
What about damage caused by company cars?
Damage caused by registered vehicles is paid by motor liability insurance, not business liability. Small machines that need no registration are often included in business liability.
Does it cover injuries to my own employees?
Work accidents of your staff in Germany are handled by the statutory accident insurance (Berufsgenossenschaft), and your direct liability is largely excluded. Business liability usually covers recourse claims the Berufsgenossenschaft may raise after gross negligence.
Do I also need product liability insurance?
If you make, process or sell goods under your own name, yes. Many insurers offer it as an add-on to business liability rather than a separate contract.
Sources
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Related questions
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Statutory disclosure (German) · Updated
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