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What is product liability insurance in Germany?

In short

What product liability insurance in Germany does: it pays if a product you make, import or sell injures someone or damages property. It is usually part of business liability insurance (Betriebshaftpflicht). Suppliers to other companies need the extended form for pure financial losses. For traders it often costs under EUR 100 a year, for manufacturers several thousand euros.

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What is product liability insurance in Germany?

What it costs

Published premium examples for business liability including product liability in Germany.

Example	Typical range
Cosmetics retail, EUR 100,000 turnover	about EUR 77 a year
Bakery with 5 employees, no branches, basic cover	from about EUR 170 a year
Bakery with 25 employees, 3 branches with café	about EUR 725 a year
Extended product liability for small firms	about EUR 200 to 500 a year
Machine shop, 10 employees, EUR 5 million limit, basic cover	about EUR 4,500 a year
Same machine shop with extended cover	about EUR 7,600 a year

Guide values as of October 2026 from publicly quoted premium examples.

The cases in the table and the assessment of when extended cover is needed are guide values from our quoting practice.

How insurers adjust tariffs to the new product liability law is still open.

Your premium depends on product, turnover and export countries; we obtain the exact quote for you.

Worked example

Online seller with an own brand sourced in Asia

A seller based in Hamburg sells chargers under their own brand, bought directly from a factory in China. One charger overheats and sets a child's room on fire.

Legal position	importer and quasi manufacturer, liable like a manufacturer
Damage to furniture, flat and smoke damage	about EUR 35,000
With business liability including product liability for imports	insurer pays, minus the deductible
Without cover for imports from outside the EU	EUR 35,000 out of your own pocket

What matters is not only that product liability is in the policy, but that own brands and direct imports are expressly included.

Who is liable for products in Germany

Under the German Product Liability Act (Produkthaftungsgesetz) the manufacturer is liable for damage caused by defective products, even without fault. Anyone who puts their name or brand on someone else's product counts as a manufacturer, and so does anyone who imports goods from outside the EU.

Sellers are liable if they cannot name the manufacturer or their supplier within one month. If you buy cheap goods directly from Asia and sell them under your own brand, the law usually treats you like a manufacturer.

Basic or extended cover

Basic product liability covers injuries and property damage: the hair dryer catches fire, the ladder breaks, the toy hurts a child. Most German business liability policies for trades and retail already include it.

Extended product liability (erweiterte Produkthaftpflicht) is meant for suppliers. It pays when your faulty part was built into another product at your customer and causes costs without anything being destroyed: removal and installation, rework or unusable end products.

Case	Basic cover	Extended cover
Faulty kettle causes a kitchen fire at a customer's home	yes	yes
Faulty seal, customer has to open 2,000 devices	no	yes
Supplied part makes a customer's whole batch unusable	no	yes
Recall of your product from shops	no	no, only with a recall policy
Replacing the faulty goods themselves	no	no

What changes from December 2026

The new EU Product Liability Directive applies to products placed on the market after 9 December 2026. Germany's new act then also treats software, firmware and apps as products. The EUR 500 deductible for property damage and the EUR 85 million cap disappear.

Fulfilment service providers and, in some cases, online marketplaces can also become liable. Check with your insurer whether software, digital features and your sales channel are expressly included.

When you do not need your own product liability

If you only provide services and sell no goods, you do not need it. Retailers who sell only branded goods from known manufacturers in the EU are usually well protected by the basic cover in their business liability.

Extended cover is rarely needed if you sell to consumers. It pays off mainly when other companies process, install or mix your products.

Step by step

Clarify whether you manufacture, import, sell under your own brand or only trade.
Check whether business customers install or process your goods.
List your export countries, especially deliveries to the US and Canada.
Check your current policy for product liability, imports and software.
If needed, ask for extended cover and a recall cost policy.

Checklist

Product liability expressly named in your business liability
Imports from outside the EU included
Own brands and resale under your own name covered
Software and digital features checked for products after 9 December 2026
Limit suited to product and volume
Extended cover if you supply other companies

Common mistakes

Believing only the manufacturer is liable, never the seller
Not reporting new products or export countries to the insurer
Assuming recall costs are covered
Insuring supplied parts with basic cover only

Questions and answers

Frequently asked

Is product liability part of business liability insurance?

The basic form usually is. Extended cover for financial losses of business customers normally has to be added.

Do I need product liability as an online seller?

Yes, as soon as you import goods from outside the EU or sell under your own brand, you are liable like a manufacturer.

Is product liability insurance mandatory in Germany?

Not by law. Large customers and sales platforms often ask for proof, though.

Does product liability pay for a recall?

No. That needs a separate recall cost insurance.

Can I get the policy documents in English?

Some insurers offer English versions for business clients. The German wording usually applies in a claim, so ask us when a clause is unclear.

Does the cover include deliveries to the US?

Only if it is expressly agreed. Exports to North America are usually insured separately and cost more.

Sources

NAMMERT insurance broker

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3Details

Business liability insurance in Germany (Betriebshaftpflicht)

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