# Insurance for construction companies and general contractors in Germany

> A construction company carries the risk for the building shell, the site, the machinery and often a whole crowd of subcontractors. As a general contractor in Germany you are also liable for things you do not control yourself. This page explains which insurance a construction company needs, what it costs and which liability no policy replaces.

Quelle/Source: https://www.nammert.com/en/business-insurance-construction-company-and-general-contractor.php  
Updated: 2026-10-14

## Is public liability enough, or do I also need contract works insurance?

Public liability pays for damage you cause to others, for example to the house next door or to a gas pipe. It does not pay for damage to your own works before acceptance. Under section 644 of the German Civil Code (BGB), the contractor bears the risk of accidental loss until the client accepts the work. If heavy rain brings down a freshly built gable wall, that is your loss. Contract works insurance covers it, ideally as an annual policy for all sites.

## At a glance

- **Compulsory:** No statutory duty to carry public liability; vehicles and registered construction machinery need motor liability, and clients regularly require proof of liability cover in the contract
- **Biggest risk:** Damage to neighbouring buildings and underground lines, and damage to your own works before acceptance
- **Basic cover from:** about €2,500 a year for the public liability of a construction company with around €1 million turnover, a guide figure from our quoting work
- **Statutory accident insurer:** BG BAU, the Berufsgenossenschaft for construction: all employees are compulsorily insured; owners are not covered by law but can insure themselves voluntarily
- **General contractor liability:** Once the total value of construction work on a building reaches €275,000, you are liable like a guarantor for your subcontractors' social security contributions (section 28e(3a) SGB IV)
- **Often forgotten:** This liability falls away if you prove your subcontractor's suitability through prequalification (section 28e(3b) SGB IV)

## What goes wrong in this trade

- **Neighbours and utility lines:** The excavator tears a power cable, underpinning cracks the house next door. These claims quickly reach six figures.
- **Damage to your own works:** Storm, heavy rain, frost or fire hit the shell before acceptance. Until then, the risk is yours.
- **Theft from site:** Copper, tools, plate compactors and mini excavators disappear overnight, and work stops.
- **Liability for subcontractors:** A subcontractor fails to pay social security contributions. As general contractor you may have to pay instead.
- **Defects after handover:** Damp basements or cracks show up years later. Disputes over remedial work are everyday business.
- **Accidents on site:** Falls from scaffolding and injuries from machinery: construction is one of the most accident prone sectors.
- **Client insolvency:** A developer gets into trouble, interim invoices stay unpaid, but your subcontractors still want their money.

**Risk radar** (Compared with other trades, 1 low to 5 high.): Liability 5, Fire and water 5, Theft 4, Cyber 2, Downtime 3, Health 4

## The insurance you need

- **Business liability** (Essential): Pays injury, property and consequential damage to third parties, for example to neighbouring buildings and utility lines. Clients almost always require it. https://www.nammert.com/en/insurance-broker-business-liability.php
- **Contractors all risks** (Strongly advised): Protects your works until acceptance against storm, heavy rain, vandalism and construction faults; best as an annual policy for all sites. https://www.nammert.com/en/insurance-broker-contractors-all-risks.php
- **Machinery breakdown** (Strongly advised): Covers excavators, cranes, compactors and small equipment against breakdown, operating errors and theft. https://www.nammert.com/en/insurance-broker-machinery-breakdown.php
- **Fleet insurance** (Strongly advised): From three vehicles, a fleet policy bundles vans, trucks and registered machinery. https://www.nammert.com/en/insurance-broker-fleet-insurance.php
- **Business legal expenses** (Strongly advised): For disputes with clients, subcontractors and authorities; construction contract law is often a separate module. https://www.nammert.com/en/insurance-broker-business-legal-expenses.php
- **Trade credit insurance** (Depends on the business): Protects against large receivables going unpaid when a commercial client becomes insolvent. https://www.nammert.com/en/insurance-broker-trade-credit.php
- **Group accident insurance** (Depends on the business): Adds fixed sums to BG BAU cover for staff and also applies off the job. https://www.nammert.com/en/insurance-broker-group-accident.php
- **D&O insurance** (Depends on the business): For managing directors of a construction GmbH who can be personally liable for breaches of duty. https://www.nammert.com/en/insurance-broker-directors-and-officers.php

## What it costs: example prices

Premiums depend on turnover, the share of building, groundwork and crane work, payroll, the value of your plant and your claims history. General contractors with a high subcontractor share are rated differently from firms with their own crews.

| Insurance | Example | Typical range |
| --- | --- | --- |
| Business liability | Construction company, €1 million turnover, €5 million limit | about €2,500 to €5,500 a year |
| Business liability | General contractor, €8 million turnover, €10 million limit | about €9,000 to €25,000 a year |
| Contractors all risks | Annual policy, €3 million annual construction output in housing | about €3,000 to €7,000 a year |
| Machinery breakdown | Plant with a replacement value of €400,000 | about €3,500 to €8,000 a year |
| Fleet insurance | Six vans and tippers, liability and partial cover | about €6,000 to €12,000 a year |
| Business legal expenses | Construction company with 20 staff, employment, contract and motoring legal expenses | about €1,200 to €2,500 a year |

For comparison: Public liability for a construction company with €1 million turnover costs about as much a year as one to two weeks of mobile crane hire.

_All figures are guide values from our quoting work, excluding German insurance premium tax, as of October 2026. Hardly any tariffs for general contractors are published, and ranges depend heavily on claims history. The sources document the legal position. We obtain the exact quote for you._

- [SGB IV, section 28e: liability in the construction industry](https://www.gesetze-im-internet.de/sgb_4/__28e.html)
- [BG BAU: compulsory insurance for companies](https://www.bgbau.de/themen/mitgliedschaft-und-beitrag/pflichtversicherung-fuer-unternehmen)
- [German Civil Code, section 644: risk until acceptance](https://www.gesetze-im-internet.de/bgb/__644.html)

## Our suggestions: three packages

- **Start** (small construction company with its own crew, conversions and single family homes): Business liability, Contractors all risks, Machinery breakdown. Together: about €4,000 to €9,000 a year
- **Construction company** (10 to 40 staff, residential and commercial building): Business liability, Contractors all risks, Machinery breakdown, Fleet insurance, Business legal expenses. Together: about €15,000 to €40,000 a year
- **General contractor** (turnkey construction with many subcontractors and large clients): Business liability, Contractors all risks, Machinery breakdown, Fleet insurance, Business legal expenses, Trade credit insurance, D&O insurance, Group accident insurance. Together: individual, usually from about €40,000 a year

## The worst day on site

Six claims construction companies really face, all on one Thursday on a site for a block of flats. Tap through and see who pays.

- 07:10: The excavator tears through a medium voltage cable. Half the neighbourhood loses power, and the network operator bills repair and consequential costs. (€45,000, Paid by: Business liability)
- 09:30: Underpinning causes cracks in the facade of the house next door. (€28,000, Paid by: Business liability)
- 11:00: The police report that a plate compactor, a laser level and a mini excavator were stolen overnight. (€38,000, Paid by: Machinery breakdown)
- 14:20: Heavy rain floods the excavation and the fresh basement wall collapses. (€32,000, Paid by: Contractors all risks)
- 16:40: A tipper truck damages a parked car while manoeuvring. (€4,500, Paid by: Fleet insurance)
- 18:30: The client cuts the final invoice over alleged defects. A surveyor and a lawyer are needed. (€9,000, Paid by: Business legal expenses)

**Damage so far:** €156,500

## Practical tips from your broker

- Take out contract works insurance as an annual policy charged on annual output. That way no site is forgotten.
- Check the public liability limits for damage to utility lines, underpinning and damage to worked on property; these are the expensive modules.
- Ask subcontractors for proof of prequalification. It removes the guarantor liability for their social security contributions under section 28e(3b) SGB IV.
- Check whether your liability policy includes your liability for subcontractors and whether it requires them to have their own cover.
- Secure machinery and materials overnight. Many plant policies require specific security measures for theft cover.
- If you work on site yourself, register voluntarily with BG BAU. As an owner you are not covered by law.

## Why NAMMERT for your business

- **We compare construction insurers:** Not every insurer writes general contractors with a high subcontractor share. As an insurance broker we approach those that do and set limits and exclusions side by side.
- **Liability and contract works without a gap:** Where liability ends, contract works must begin. We match both policies instead of buying them separately.
- **Business, fleet and private in one place:** Sites, vehicles, management liability and your own pension are handled together by Norman Nammert as your insurance broker.
- **Family business, placing cover since 1989:** Many construction firms are family businesses like ours. Our work is free for you; the insurer pays our commission. We speak English and German.

## FAQ

### Is public liability compulsory for construction companies in Germany?

Not by law. Public and private clients almost always require it in the construction contract, often with set minimum limits.

### What does insurance for a construction company cost?

Public liability at about €1 million turnover usually costs €2,500 to €5,500 a year, an annual contract works policy for €3 million output €3,000 to €7,000. These are guide values from our quoting work.

### Am I liable for my subcontractors as general contractor?

For their social security contributions, yes, once the total value of construction work on the building reaches €275,000, like a guarantor (section 28e(3a) SGB IV). The liability falls away if you prove the subcontractor's suitability through prequalification.

### Am I insured with BG BAU as the owner?

Your employees are compulsorily insured. You as owner are not covered by law, but you can take out voluntary cover.

### Who insures the building during construction?

Until acceptance the risk lies with the contractor under section 644 BGB. Contract works insurance can be taken out by the client or the contractor; the contract should say clearly who does it.

### Is damage caused by my subcontractors in my liability policy?

Your own liability for subcontractors you hire is included in many construction tariffs. Subcontractors still need their own liability cover; ask for proof.

## Request quotes

We obtain quotes and come back with a comparison, free of charge. You can write in English. https://www.nammert.com/en/business-insurance-construction-company-and-general-contractor.php#anfrage

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Your broker: Norman Nammert, trading as NAMMERT. Insurance broker licensed under section 34d(1) of the German Trade Regulation Act. Broker register no. D-C08Q-TOSD4-37. NAMMERT Assekuradeur GmbH is a separate company. It does not arrange your contract.

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