# Insurance for developers, project developers and commercial builders in Germany

> A developer (Bauträger) carries the risk of a builder, a seller and a coordinator all at once, and for years. The excavation puts the neighbouring house at risk, a storm knocks down the shell, and after handover buyers argue about defects for five years. This page shows which insurance covers which stage of a project.

Quelle/Source: https://www.nammert.com/en/business-insurance-property-developer.php  
Updated: 2026-09-18

## Aren't we covered by our contractors' insurance?

Only partly. A contractor's public liability covers damage they cause to third parties, not your own liability as the builder for the site, and not damage to the building itself. If the shell builder sets up the crane wrongly and the wall collapses, you need your contract works insurance; if a passer by is hurt at an unsecured excavation, you are liable as the builder alongside the contractor.

## At a glance

- **Compulsory:** No insurance is required by law. But the licence under § 34c GewO and the MaBV, the German regulation on developers' and agents' duties, require security for buyers' money, meaning payment in stages as construction progresses or a bank guarantee
- **Biggest risk:** Damage to neighbouring property and to your own shell, plus disputes over defects after handover
- **Basic cover from:** about 350 to 600 euros as a one off premium per detached house project for builder's liability (Bauherrenhaftpflicht); for ongoing projects as an annual policy based on construction volume
- **Statutory accident insurer:** VBG, the Berufsgenossenschaft for administration and services, for developers who only run an office; if you build with your own workers, you belong to BG BAU, the accident insurer for construction
- **Often forgotten:** Fire cover for the shell (Feuerrohbau): fire in the unfinished building is not covered by contract works insurance but needs its own buildings policy
- **WZ 2025 / NACE:** 68.11 Kauf und Verkauf von eigenen Grundstücken, Gebäuden und Wohnungen, 68.12 Erschließung von Grundstücken; Bauträger

## What goes wrong in this trade

- **Neighbours and excavation:** Settlement cracks in the house next door from digging or dewatering, a crane swinging over someone else's roof: damage to neighbours is the classic claim in residential building.
- **Shell in a storm:** A freshly built gable wall without a roof structure, a thunderstorm, a section of wall that collapses. Contract works insurance pays for rebuilding.
- **Fire on site:** Roofers with torches, screed dryers, site power: fire in the shell is not included in contract works insurance and needs separate fire cover for the shell.
- **Theft of installed parts:** Copper pipes, boilers, windows: things that are already fitted disappear at night just like tools.
- **Planning and coordination:** A planning mistake or a wrong building specification leads buyers to cut the price or withdraw from the contract, without anything being physically damaged.
- **Disputes over defects:** After handover you are liable for defects for five years. Surveyors and court cases are almost part of the business in this industry.

**Risk radar** (Compared with other trades, 1 low to 5 high.): Liability 5, Fire and water 5, Theft 3, Cyber 3, Downtime 3, Health 2

## The insurance you need

- **Business liability** (Essential): As developer's liability it covers your liability as the builder for the site, neighbouring plots and passers by across all your projects. https://www.nammert.com/en/insurance-broker-business-liability.php
- **Contractors all risks** (Essential): Contract works insurance pays for damage to the building under construction from storm, heavy rain, vandalism, theft of installed parts and construction errors until handover. https://www.nammert.com/en/insurance-broker-contractors-all-risks.php
- **Commercial buildings** (Essential): As fire cover for the shell it protects the unfinished building against fire and turns into the buyers' or owners' association's buildings insurance on completion. https://www.nammert.com/en/insurance-broker-commercial-buildings.php
- **Professional indemnity** (Strongly advised): Covers financial loss from planning, building specifications and coordination, if you plan yourself or commission the plans and coordinate. https://www.nammert.com/en/insurance-broker-professional-indemnity.php
- **Business legal expenses** (Strongly advised): For disputes with buyers, contractors and authorities; many policies only cover construction law to a limited extent, so this must be clarified in advance. https://www.nammert.com/en/insurance-broker-business-legal-expenses.php
- **D&O insurance** (Depends on the business): For managing directors of a project GmbH, who can be personally liable for mistakes in financing and contracts. https://www.nammert.com/en/insurance-broker-directors-and-officers.php
- **Cyber insurance** (Depends on the business): For fake invoices and payment instructions that fraudsters use to divert stage payments. https://www.nammert.com/en/insurance-broker-cyber-insurance.php

## What it costs: example prices

For individual projects you usually pay a one off premium per build, based on the construction cost and type of building. If you build continuously, you get an annual policy charged on your construction volume.

| Insurance | Example | Typical range |
| --- | --- | --- |
| Business liability | Builder's liability for a house with 500,000 euros construction cost | about 350 to 450 euros one off |
| Business liability | Builder's liability for 800,000 euros construction cost | about 580 to 750 euros one off |
| Contractors all risks | Single building with 500,000 euros construction cost, 500 euros excess | about 400 to 700 euros one off |
| Contractors all risks | Block of flats with 3 million euros construction cost | about 2,500 to 5,500 euros for the construction period |
| Commercial buildings | Fire cover for the shell of a block of flats, 3 million euros rebuilding value | often 0 euros for up to 12 months if buildings insurance with the same insurer follows |

For comparison: Builder's liability and contract works cover for a detached house together cost about as much as a single installed living room window.

_Guide prices excluding German insurance premium tax, as of September 2026. The single building figures come from published examples; the figures for larger projects are guide values from our own quoting experience. Annual policies are calculated on your construction volume._

- [transparent-beraten.de: builder's liability insurance](https://www.transparent-beraten.de/bauherrenhaftpflichtversicherung/)
- [transparent-beraten.de: contract works insurance](https://www.transparent-beraten.de/bauleistungsversicherung/)

## Our suggestions: three packages

- **Project** (A single house or small project of a project GmbH): Business liability, Contractors all risks, Commercial buildings. Together: about 800 to 1,500 euros one off per detached house
- **Developer** (Developer with several projects a year and in house planning): Business liability, Contractors all risks, Commercial buildings, Professional indemnity, Business legal expenses. Together: annual policy, usually from about 5,000 euros depending on construction volume
- **Project developer** (Project developer with several companies and large volumes): Business liability, Contractors all risks, Commercial buildings, Professional indemnity, Business legal expenses, D&O insurance, Cyber insurance. Together: calculated individually, usually five figures a year

## The worst day on the building site

Six things that really happen to developers, all packed into a single autumn day. Click through the day and see who pays.

- 06:45: Overnight, copper pipes and two heat pumps that had already been installed were stolen from the shell. (€28,000, Paid by: Contractors all risks)
- 09:20: Settlement cracks appear in the house next door after the excavation. Surveyor, underpinning, repairs. (€65,000, Paid by: Business liability)
- 12:30: A cyclist trips over the unsecured foot of the site fence on the pavement. (€9,000, Paid by: Business liability)
- 15:10: The insulation catches fire during roof sealing and the roof structure burns out. (€180,000, Paid by: Commercial buildings)
- 17:00: A buyer demands a price reduction because the building specification promised a larger terrace than planning permission allowed. (€24,000, Paid by: Professional indemnity)
- 19:30: A severe storm pushes in a freshly built gable wall. (€32,000, Paid by: Contractors all risks)

**Damage so far:** €338,000

## Practical tips from your broker

- Take out contract works and fire cover for the shell before breaking ground, not at the topping out ceremony.
- Choose at least 5 million euros for developer's liability, and more like 10 million for inner city projects with neighbouring buildings.
- Have a condition survey of the neighbouring buildings done before work starts. Later it decides which cracks are really new.
- Check whether theft of fixed installations and damage by unknown persons are included in your contract works insurance.
- Ask every trade for proof of public liability with a sufficient sum before they come on site.
- Always get telephone confirmation when a supplier changes bank details; invoice fraud hits developers particularly often.

## Why NAMMERT for your business

- **We think in projects:** Every build needs different sums and terms. As brokers we match liability, contract works and fire cover to each project and get quotes from several insurers.
- **We know large property claims:** In boat insurance we handle claims ourselves, including total losses. After a fire in the shell, we know how to negotiate rebuilding and surveys with the insurer.
- **Handover without a gap:** We make sure the fire cover for the shell passes seamlessly into the buildings insurance of the buyers or the owners' association, and we can arrange that cover too.
- **A family business since 1989:** Projects run for years, and so do we. You have fixed contacts, and the insurer pays our commission.

## FAQ

### Do developers need compulsory insurance?

No, there is no legal duty to insure. The MaBV protects buyers through staged payments or a bank guarantee. Without liability and contract works cover, the developer carries the full risk alone.

### What is the difference between builder's liability and contract works insurance?

Liability pays when third parties suffer damage, such as neighbours or passers by. Contract works pays for damage to your own building until acceptance.

### Is the shell insured against fire?

Not through contract works insurance. That is what fire cover for the shell is for, and many insurers provide it free for up to twelve months if buildings insurance follows.

### Does insurance cover defects after handover?

No, putting right your own defects is not an insured loss. What is insured is consequential damage to other property and to people. Legal expenses cover helps in disputes, provided construction law is included.

### What does insurance for a building project cost?

For a detached house with 500,000 euros construction cost, builder's liability and contract works together come to about 750 to 1,150 euros one off. Larger projects are priced on construction cost.

### Who is liable if a contractor damages the house next door?

First the contractor, through their public liability. But as the builder you can be jointly liable, for example for lack of supervision. Then your developer's liability steps in.

## Request quotes

We obtain quotes and come back with a comparison. Free of charge and without obligation: the insurer pays our commission. You can write in English. https://www.nammert.com/en/business-insurance-property-developer.php#anfrage

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NAMMERT Assekuradeur GmbH, insurance broker licensed under section 34d(1) of the German Trade Regulation Act, broker register no. D-C08Q-TOSD4-37. For boat and yacht insurance we act as underwriting agency, not as broker.

NAMMERT Assekuradeur GmbH, Karl-Marx-Straße 4, 15711 Königs Wusterhausen, +49 3375 29 12 77, info@nammert.com. Wikidata: Q141141479.