Insurance cover for new entrepreneurs

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Professional and public liability: Settling claims arising from company activities, e.g. damage to customer property when delivering goods.

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Product liability: Assuming liability for product defects at the company’s expense, even if not at fault.

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Environmental liability: Protection against claims for damages resulting from environmental damage caused by self-employment activities.

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Motor insurance: Mandatory insurance in the private, commercial and freelance sectors. Protection against damage caused by motor vehicle operations. You can also insure yourself against damage to your own vehicle by adding third party or comprehensive insurance.
Tip: The costs incurred should be discussed with your insurance company before purchasing the vehicle, as tariffs vary considerably depending on vehicle type, engine output, frequency of theft etc.

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Electronic or special computer insurance Protection against financial loss due to failure e.g. of an IT system. Special insurance also covers computer abuse or viruses, as well as the loss of saved information or programs (at least in financial terms).

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Machinery insurance and machinery business interruption insurance Protection against financial loss due to operation or maintenance errors, as well as against loss of earnings resulting from repairs to the damaged machinery.

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Transport insurance: Goods transport insurance insures goods being transported at your own risk by a third party. If using your own transport, obtaining own-account transport insurance or vehicle contents insurance can minimise the risk.

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Exhibition insurance: This insurance covers damage to products at trade fairs and exhibitions.

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Accounts receivable insurance If accounts receivable are not recoverable e.g. as a result of customer bankruptcy, you can protect yourself against this using commercial credit insurance and goods credit insurance (domestic) or export credit insurance (foreign).

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Legal expenses insurance: Risks relating to legal disputes (legal fees, court fees, etc.) can be reduced by obtaining this insurance. A distinction is drawn between areas such as transaction, property loss, land and rent law cover.

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Operating costs insurance: Ongoing operating costs are covered in the event of temporary inability to work on the part of the entrepreneur.

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Absenteeism insurance: If employees are absent due to illness, insurance can cover the costs of the six weeks of continued payment of wages.

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Statutory health insurance: Entrepreneurs are able to insure themselves using statutory or private health insurance. Contribution calculations differ between statutory and private health insurance schemes. Statutory health insurance takes into account the entrepreneur’s income. Private health insurance sets contributions according to individual factors such as age, gender, occupational risks and pre-existing conditions. Freelancers may not return to statutory health insurance from private health insurance. New membership of statutory health insurance is only an option following unemployment with Federal Employment Agency benefits, or upon re-entering an employment relationship. However, those aged 55 and older generally cannot return to statutory health insurance even if they meet the requirements set out above. Since 1 April 2007, freelancers have in principle been subject to mandatory health insurance.

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Statutory pension insurance: Statutory pension insurance includes pension insurance for workers, employees and miners. Since pension insurance in principle covers all those working as employees, self-employed individuals (with a few exceptions e.g. teachers, artists, craftsmen) are responsible for taking their own preventative measures for insurance coverage. You are entitled to a pension after being a member of the statutory pension insurance scheme for five years. If not already subject to mandatory insurance, self-employed individuals may obtain the mandatory insurance upon application. This provides the same insurance coverage as for self-employed individuals subject to mandatory insurance. The application for mandatory insurance must be filed within five years of beginning self-employment. Once approved, however, the application may not be withdrawn and the entrepreneur remains liable for the insurance for the duration of their self-employment.

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Nursing care insurance: All members are fundamentally subject to mandatory statutory nursing care insurance. Voluntarily insured members are also subject to mandatory insurance. However, the latter are able to file an exemption request within three months if they can prove that they have appropriate private insurance. Voluntarily insured entrepreneurs or similar can therefore choose between private or statutory insurance. People who leave statutory nursing care insurance schemes cannot return as members whilst self-employed. Statutory nursing care insurance also insures spouses and children free of charge. Private nursing care insurance, on the other hand, charges an additional contribution for spouses. However, children remain compulsorily insured free of charge.

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Statutory accident insurance: Statutory accident insurance is an employer’s liability insurance. The role of accident insurance is to use all appropriate means to prevent accidents at work, occupational illness and work-related health hazards, to use all appropriate means to restore the health and performance of the insured person following accidents at work or occupational illness, and to pay compensation to the insured person or their surviving dependants. Accident insurance providers are generally trade associations. The extent to which entrepreneurs are also subject to mandatory insurance despite not having any employees depends on the different trade association statutes. (See IHK24 heading 'Statutory Accident Insurance')

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Statutory unemployment insurance: Since 1 January 2006, entrepreneurs have been able to voluntarily pay statutory unemployment insurance contributions. The initially limited insurance option has now become unlimited. Since the beginning of 2011, contributions have increased and the cancellation period is now different. More detailed information is available from our internet information on the topic and from the Federal Employment Agency.

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Endowment life insurance: This form of insurance serves as financial protection in old age and for your family. In addition to the insurance sum agreed, the surplus generated by the insurance is also paid out. In addition, this cover insures surviving dependants upon the death of the entrepreneur.

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Term life insurance: This insurance only offers financial protection for the risk of fatality, i.e. if the insured person dies then the insurance sum agreed will be paid out to surviving dependants.

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Private pension insurance: Unlike endowment life insurance with a one-off payment, you can also opt for a subsequent private pension. The contribution amount, guaranteed pension amount, beginning of payout and (where relevant) scope for surviving dependants is contractually agreed.

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Occupational disability insurance: This insures against entrepreneur loss due to occupational disability. It is generally granted if the insured person is prevented from professional practice for more than six months by illness or accident.

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Private accident insurance: Unlike statutory accident insurance, private accident insurance applies ‘round the clock’, i.e. during both working hours and leisure time. However, payouts are only made in the event of an accident, not illness.

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Private health insurance: If entrepreneurs are not voluntary members of the statutory health insurance scheme, the remaining option is private health insurance to cover medical costs.

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Hospital daily allowance insurance: This can cover various additional costs of inpatient treatment.

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Supplementary hospital insurance: If the entrepreneur is still a member of the statutory health insurance scheme, they can secure additional services (e.g. single or double room, private medical treatment) during a hospital stay through supplementary hospital insurance.

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Daily sickness benefits insurance: This insurance absorbs loss of earnings in the event of a freelancer’s illness, regardless of whether treatment is received at home or at hospital.

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Supplementary care insurance: Both statutory and private forms of mandatory nursing care insurance offer only basic protection. Those wishing to claim additional services in the event of a need for care can obtain additional private insurance.