# Business liability insurance in Germany: what founders from abroad need to know > In Germany a business is liable without any upper limit for injury or damage it causes to others, and a sole trader is liable with personal assets. Betriebshaftpflicht is the German version of general or public liability insurance. It works much like cover elsewhere, but the details that decide a claim are specific to German law. Quelle/Source: https://www.nammert.com/en/insurance-broker-business-liability.php Updated: 2026-09-18 ## Is business liability insurance compulsory in Germany? For most businesses, no. Only a few trades are legally required to hold it, security firms being the best known example (§ 34a Trade Regulation Act). In practice you will rarely manage without it: clients, landlords of commercial premises and public tenders routinely ask for a certificate. What matters more is that liability under the German Civil Code (§ 823 BGB) has no cap, so one serious injury claim can end a small company. ## At a glance - **Compulsory?:** No, except for a few trades such as security services - **Typical limit:** EUR 3 to 10 million combined for bodily injury and property damage - **Premium basis:** turnover, payroll or headcount, depending on the trade - **Employers' liability:** not a separate policy: employee injuries are handled by the statutory accident insurer (Berufsgenossenschaft) - **Cancellation:** at renewal with three months' notice, or after a claim ## No separate employers' liability policy, but a regress risk If you come from the UK, you will look for compulsory employers' liability insurance. Germany does not have it in that form. Every employer must join a Berufsgenossenschaft, the statutory accident insurer for its sector, which pays for workplace injuries. In return, the employer is largely shielded from injury claims by its own staff (§ 104 Social Code VII). The catch: if the business caused the accident through gross negligence, for example missing fall protection, the Berufsgenossenschaft can claim its costs back from the employer (§ 110 Social Code VII). A good Betriebshaftpflicht covers these recourse claims explicitly. Check for this wording, because it is the part of employers' liability that German law leaves to private insurance. ## The activity description is the policy German insurers underwrite the risk described in the contract, not the company as a whole. If your policy says "software development" and you start installing hardware on client sites, the installation work may not be covered. Many disputes after a loss begin with the question of whether the activity was insured at all. Describe everything the business actually does, including occasional work, and update the insurer when the business changes. New activities are often provisionally covered for a period, but only if you report them. Annual turnover declarations are common, and understating them can reduce what the insurer pays. ## Two standard gaps: work on clients' property and rented premises Damage to the very thing you are working on, such as the floor you are sanding or the machine you are repairing, is excluded under standard German wording. This is called a Tätigkeitsschaden and must be added back in, usually with its own sub-limit. For tradespeople and on-site service firms it is the most important extension. Damage to premises you rent for the business, such as a fire spreading from your stockroom, is only covered through an extension for Mietsachschäden. Product liability is another area to check: under German law a seller of defective goods must pay for removal and reinstallation (§ 439 BGB), and such purely financial losses need the extended product liability section. ## What is covered - Bodily injury and property damage to clients, suppliers and the public - Financial losses that follow from such injury or damage - Legal defence against unjustified claims, in court if necessary - Personal liability of employees acting for the business - Recourse claims by the Berufsgenossenschaft and social insurers - Damage to rented business premises, if included - Damage to property being worked on, if included - Product liability after goods have left the business ## What is not covered - Intentional damage - Fixing your own defective work (warranty obligations) - Contractual penalties and guarantees beyond statutory liability - Pure financial loss from advice or design, which needs professional indemnity cover - Registered vehicles, which need motor liability insurance - Claims under US or Canadian law unless expressly agreed - Cyber incidents, usually only through a cyber policy ## Who needs it - Tradespeople and contractors working at clients' premises - Shops, cafés, restaurants and any business with walk-in customers - Manufacturers, importers and online sellers of physical goods - Service firms with staff, such as cleaning, events or facility management - Founders whose clients or landlord ask for proof of cover ## Who can do without - Pure desk-based consultants without client visits, if professional indemnity with office liability is in place ## What it costs There is no standard price, because insurers rate each trade very differently. An office with two staff and a roofing firm of the same size pay premiums that are many times apart. A reliable figure needs the trade, turnover and headcount. **What drives the premium:** - Trade and exact activities, the single biggest factor - Annual turnover, payroll or number of employees - Limit of indemnity and deductible - Extensions such as work on clients' property or extended product liability - Exports, especially to North America - Claims history _We do not publish sample premiums here, because published comparisons only cover individual trades. Your premium is fixed only in the quote we obtain for you._ ## The policy levels on the market - **Basic cover:** Statutory liability with around EUR 3 million combined and few extensions. Suitable for simple risks without work on clients' property. - **Trade package:** Designed for one trade, such as electricians or restaurants, with the usual extensions for that sector and typically EUR 5 million. The standard choice for small firms. - **Tailored policy:** EUR 10 million or more, extended product liability, environmental damage cover and worldwide territory. For manufacturers and exporters. ## How to recognise a good policy | Criterion | Minimum standard | Strong policy | Why it matters | | --- | --- | --- | --- | | Limit of indemnity | EUR 3 million combined | EUR 5 to 10 million combined | A single serious injury with lifelong care costs can exceed three million. | | Work on clients' property | excluded | included up to a meaningful sub-limit | The object you work on is the one most likely to be damaged. | | Social insurance recourse | included | included without a special sub-limit | After a grossly negligent workplace accident the Berufsgenossenschaft claims its costs back. | | Rented premises | low sub-limit | up to the full limit, including fire and water | A fire in rented premises otherwise falls on the business. | | Extended product liability | not included | removal and reinstallation costs included | Buyers of defective parts pass these costs up the supply chain. | | Territory | Europe for temporary work | worldwide, North America by agreement | Installations and deliveries abroad bring foreign liability law into play. | | Run-off and new risks | provisional cover for new activities | run-off cover after the business closes | Claims from old jobs often appear years later. | ## Insurers on the German market Almost every large German property and casualty insurer writes business liability, often through trade packages. The list below describes the German market; it says nothing about which insurers we work with. - **Allianz**: trade packages for many sectors, sold through agents and brokers - **AXA**: commercial lines through agents and brokers - **HDI**: part of the Talanx group, strong focus on small business and professions - **R+V**: insurer of the German cooperative banks - **VHV**: focus on construction and trades, mainly through brokers - **Haftpflichtkasse**: mutual insurer specialising in liability, sold through brokers - **Zurich**: German entity of the Zurich group, based in Frankfurt - **Markel**: specialty insurer based in Munich, broker distribution only - **Gothaer**: mutual group, commercial lines through agents and brokers 127 insurers supervised by BaFin, the German regulator, are licensed for this class of insurance. (Allgemeine Haftpflicht). Source: BaFin company database, retrieved 2026-09-18. Insurers from other EU countries selling through a branch or without a German office are not included. ## Typical claims and who pays - **Barista's hot coffee scalds a customer** (roughly €2,000 to €20,000): Bodily injury on your premises is the core of the cover. German damages for pain and suffering are modest by US standards, but medical and loss of earnings claims add up. - **Staff lose the client's master key** (€5,000 to €50,000 for a new locking system): Lost third party keys are often capped at a small sub-limit. Only strong policies cover the full replacement of a central locking system. - **Fitter damages the kitchen he installs** (roughly €2,000 to €10,000): Damage to the object you are working on is excluded in basic wordings. Strong policies buy it back with a sub-limit. - **Leak damages the rented office** (roughly €5,000 to €30,000): Damage to the premises you rent is a separate extension. Cheap policies set a low limit or leave out certain causes. - **Client sues because you delivered late** (often five figures): Delay is a breach of contract, not an accident. Business liability pays for injury and property damage, not for missed deadlines. - **Fake invoice email fools your accounts** (often five figures): Money sent to fraudsters is your own loss and a cyber or crime matter. A liability policy only responds to claims from third parties. ## Myth or truth - „Every business in Germany is legally required to have liability insurance." ✘ False, there is no general obligation. A few trades need it by law, such as security firms. Landlords and business customers often ask for proof anyway. - „A German liability insurer also pays to fight claims that turn out to be unfounded." ✔ True, defending unjustified claims is part of the cover. The insurer handles the dispute and pays the lawyers. - „Even a grossly negligent mistake is covered by German business liability insurance." ✔ True, only intent is excluded. Forgetting to secure a site or skipping a checklist is still covered. - „German courts can award punitive damages against a business." ✘ False, German law compensates actual loss and does not award punitive damages. That is one reason why US exposure is excluded unless expressly agreed. - „An injured customer can send their claim straight to your insurer and sue them." ✘ False, for voluntary liability insurance the claim goes against your business. A direct action against the insurer exists mainly for compulsory covers such as motor liability. ## Common mistakes - Assuming a UK or US policy from head office automatically covers the German entity - Describing the business too narrowly and leaving side activities uninsured - Leaving out work on clients' property although staff work on site - Not updating turnover after the business grows - Believing liability insurance pays to fix your own defective work ## FAQ ### Does my company's global policy cover our German GmbH? Not automatically. Many international programmes need a local German policy, because foreign insurers cannot simply write German risks and German clients want a German certificate. Check with the programme broker whether a local policy is in place. ### Do I need employers' liability insurance in Germany? Not as a separate policy. Workplace injuries are covered by the statutory Berufsgenossenschaft, which every employer must join. Your Betriebshaftpflicht should still cover recourse claims from the Berufsgenossenschaft after a grossly negligent accident. ### What limit of indemnity is normal? Small firms usually choose EUR 3 or 5 million combined for bodily injury and property damage. Construction, manufacturing and businesses with many visitors should consider EUR 10 million. The extra premium for higher limits is often modest. ### Is a freelancer's liability covered by private liability insurance? No. German private liability policies exclude professional and commercial activities. As a freelancer you need business liability, professional indemnity or a combination, depending on whether your risk is physical damage or financial loss. ### Does business liability cover faulty work? No. Putting right your own defective work is a warranty matter and remains your cost. The policy covers damage to other property caused by the defect, such as water damage from a leaking pipe you installed. ### Are subcontractors covered by my policy? Your liability for their mistakes towards your client is covered, their own liability is not. Ask subcontractors for their own certificate of insurance before they start work. ### Can I get the policy documents in English? Some insurers provide English translations, but the German wording is legally binding. We explain the key clauses in English so you know what you are signing. ### Why use a broker in Germany? Because the differences lie in the wording, not the brand, and the wording is in German. We describe your business accurately, check the extensions against what you actually do and support you when a claim arises. ## Legal basis and sources - [Insurance Contract Act (VVG, German)](https://www.gesetze-im-internet.de/vvg_2008/) - [BaFin company database (licensed insurers)](https://portal.mvp.bafin.de/database/InstInfo/) ## 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/insurance-broker-business-liability.php#anfrage --- 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.