Which legal expenses insurance do self-employed people need in Germany?

Premiums and litigation costs from published examples and calculators, as of October 2026.

Many people who move to Germany as employees take out private legal insurance and keep it when they go freelance. The problem: German policy terms exclude disputes that come from your self-employed activity. The client who does not pay, the assistant who sues over a dismissal, the landlord of your studio: none of that is covered.

For your business you need a separate contract. Insurers sell it as Firmenrechtsschutz or Rechtsschutz für Selbstständige, often bundled with private and traffic cover in one package.

Business legal insurance is built from modules. The basic form usually covers damages claims, criminal and administrative offence proceedings and tax disputes in court. On top you choose employer, property, traffic and contract cover.

Choose by the dispute you are most likely to have. A freelance developer without staff will argue with clients about invoices and acceptance; a bakery with five employees more likely with staff; a courier service with authorities and on the road.

For many freelancers the biggest risk is a client who refuses to pay and claims the work was faulty. Exactly this module is not included in every business policy. It often costs extra, is limited to certain trades or caps the number of cases per year.

Also check whether claims are only covered above a minimum amount, and whether only disputed invoices count. If a client simply does not pay and does not argue about the work, the German court dunning procedure (Mahnverfahren) is often enough and much cheaper than a lawsuit.

Disputes between partners in a company, insolvency proceedings and competition law are rarely insurable. Building work on your own premises, patents and copyright are often excluded too. If you run a GmbH with partners, have the shareholder agreement drafted carefully instead.

Watch the waiting period: three months for many modules, often none for damages and criminal cover. A dispute that has already started will not be covered. If you switch without a gap, many insurers count your previous contract.

If you work alone, have a few large clients with clean written contracts, take payment up front and do not rent premises, your risk is manageable. The basic form plus private and traffic cover may be enough, and contract cover can wait.

With employees it is different. At the German labour court each side pays its own lawyer in the first instance, even if you win. The employer module pays off quickly.