Business insurance in Germany:
two provisions decide most of it.

Christoph SchulerFounder, Business Center Reutlingen · 15+ years with Mercedes, including two years living in Bangalore · Written 29 August 2026

What is actually compulsory

Founders arriving from outside Germany usually expect a long list of statutory insurance obligations. There is not one. The compulsory items are these.

• Statutory accident insurance through the Berufsgenossenschaft responsible for your sector. Membership is not chosen, it follows from what the business does, and the contribution is borne by the employer alone. § 192 SGB VII requires you to notify the type and object of the business, the number of insured persons and the opening date within one week of starting operations, and changes within four weeks. Whether the managing director is personally covered depends on the association's statutes and their status; voluntary cover for entrepreneurs is available under § 6 SGB VII and is worth asking about.
• Health insurance for anyone resident in Germany, statutory or private.
• Motor third-party liability if the company owns or keeps vehicles.
• Sector-specific requirements, some regulated activities carry their own compulsory professional indemnity cover.

Everything below is voluntary as a matter of law. Two of them are not optional as a matter of business, and the reasons have nothing to do with insurance salesmanship.

The one that catches foreign directors

This is the single most expensive misunderstanding we encounter, and it is entirely understandable: the word "limited" is in the name of the company.

Note who the claimant is. It is the company itself, which sounds harmless while you control the company and stops sounding harmless the moment you do not. In an insolvency the administrator steps into the company's shoes and reviews the managing director's conduct as a matter of routine, because that claim is an asset of the estate. It is pursued against your private assets, and the five-year period means it can arrive long after you thought the matter closed.

Add the obligation to file for insolvency within the deadlines in § 15a InsO and the personal repayment exposure for payments made afterwards under § 15b InsO, and the position of a managing director is materially different from what most founders assume when they choose a limited company.

D&O insurance, directors' and officers' liability, exists for exactly this. It is taken out by the company for the benefit of the director, and for a foreign director who is not in Germany to see problems developing, it is the cover we would put first after general liability.

The one that catches importers

If your German company brings goods into the EU, and for a large share of the companies we help set up, that is the whole business model, this provision decides your risk profile.

So a German GmbH importing components, textiles, machinery or consumer goods from India carries producer liability in the EU for those goods, irrespective of who actually made them and irrespective of what the supply contract with the Indian factory says. Liability under the Product Liability Act does not depend on fault. An indemnity from your supplier may give you a claim against them, but it does not stand between you and the injured party, and enforcing it across jurisdictions is a different project entirely.

§ 4(3) adds a trap worth building into your processes: where the manufacturer cannot be identified, every supplier is treated as the manufacturer unless it names its own supplier or the manufacturer within one month of being asked. Keep records that let you answer that question inside a month, for every batch, for years.

The insurance answer is product liability cover, usually with extended product liability for recall, dismantling and reinstallation costs. This is also where the premium depends heavily on what you import, which is a conversation for a broker who has seen the category before rather than for a comparison portal.

The baseline cover everybody expects

Betriebshaftpflicht, general business liability, covers damage your company causes to third parties. It is not compulsory and it is nonetheless the first thing anybody asks you for. Commercial landlords ask for proof before handing over keys. German corporate customers ask for a certificate as part of supplier onboarding, often with a stated minimum sum insured. Trade fairs and many public sector clients ask as a matter of course.

For a foreign-owned company already working to establish that it is a serious counterparty, not having it is a needless obstacle, and the premium at the small end of the market is not the reason anybody goes without.

The covers themselves, and what each is actually for

Beyond the two provisions above, this is the ordinary shopping list. It is short, and each item exists for a reason worth understanding before you decide against it.

Legal expenses, including employment law

German employment disputes have a feature foreign employers find surprising: in the first instance before the labour court each side bears its own lawyer's costs regardless of who wins. A dismissal that is challenged therefore costs you money even if you are entirely in the right. Cover changes how a claim feels and, more usefully, how a settlement negotiation goes.

Contents and electronics

Fitted-out office space, equipment, stock. The electronics element matters more than people expect because ordinary contents cover often treats a server or a machine tool differently from a desk.

Business interruption

Pays the running costs and the lost margin while you cannot trade. It is the cover that decides whether a fire is an expensive year or the end of the company, and it is almost always taken together with contents rather than separately.

Cyber

For a company handling personal data of people in the EU this is not only an IT question. The GDPR obliges you to notify a personal data breach to the supervisory authority without undue delay and where feasible within 72 hours. Cyber policies typically fund the incident response, the forensics, the notification process and the legal work, which is the part nobody has capacity for in the week it happens. Whether a regulatory fine itself is insurable is contested in Germany; do not assume it is.

Goods in transit and warehouse

If you import, the goods are exposed from the factory gate to your customer's door, including the weeks they sit in a fulfilment centre or a bonded warehouse. Check where the seller's cover ends and yours begins, the Incoterm in your purchase contract decides that, and it is frequently not where people assume.

Trade credit

If you will grant payment terms to German customers you cannot assess from abroad, credit insurance both pays on default and, more usefully, gives you an insurer's view of the customer's creditworthiness before you ship. For a new entrant that second function is often worth more than the first.

Two provisions that decide whether a policy pays at all

This section is the reason we wrote the article. Everything above is about choosing cover. These two are about whether the cover you chose actually responds, and both catch foreign companies disproportionately, for reasons that have nothing to do with bad faith.

Read that against the situation of a founder filling in a German application form in a second language, in a hurry, before the first shipment. The question "have there been claims in the last five years" or "is there any pending litigation" is easy to answer carelessly. The policy is issued, the premium is paid, and the problem only becomes visible at the claim, which is the worst possible moment to discover it.

There is a safeguard worth knowing. The insurer forfeits those rights if it failed to warn you separately, in text form, about the consequences of a breach, or if it already knew the circumstance. So keep the application documents, including the warning notice, rather than discarding them once the policy arrives.

The practical rule: answer the questions in writing, keep a copy of what you answered, and where you are unsure, disclose rather than omit. Over-disclosure costs a slightly higher premium. Under-disclosure can cost the entire cover.

The arithmetic is unforgiving. A company that insured stock for 50,000 € and is holding 150,000 € when a fire happens does not receive 50,000 €, it receives a third of the loss. For an importing business whose stock level rises as it grows, this is the classic failure: the sum insured was right in year one and nobody revisited it.

Review the sums insured whenever the business changes shape, a new lease, a bigger container, a second machine. It takes one email and it is the difference between a covered loss and a partly covered one.

If you are moving here yourself

Everything above concerns the company. If you are also relocating, a separate and much shorter list applies to you personally, and one item on it surprises almost everyone.

• Health insurance, compulsory. Everyone resident in Germany must be insured, statutory or private. This is not optional and it is checked.
• Personal liability (Privathaftpflicht), not compulsory, and almost everyone has it. The reason is § 823 BGB: whoever unlawfully injures another's life, body, health, freedom or property is obliged to compensate the resulting damage, and that obligation is not capped at what you own. A moment's carelessness that injures someone can follow your income for years. In many countries this risk is limited in practice; in Germany it is not, which is why a cover costing a few euros a month is treated as a basic and not as a luxury. If you take one personal policy in your first month, take this one.
• Household contents (Hausrat), worth having once the flat is furnished, and the same § 75 underinsurance logic applies.
• Legal expenses (Rechtsschutz), commonly held, and the tenancy module is the one people are glad of.
• Occupational disability (Berufsunfähigkeit), priced on age and health, so it gets more expensive every year you postpone it. If you are young and healthy on arrival, this is the cheapest it will ever be.

Statutory accident insurance through the Berufsgenossenschaft covers accidents at work and on the way there. It does not cover your private life, which is a gap people assume is closed.

You, personally

Two things sit outside the company and get forgotten.

First, the Statusfeststellungsverfahren. § 7a SGB IV allows the parties to apply to the Deutsche Rentenversicherung Bund for a decision on whether an engagement is employment or self-employment, and where a registration shows the person to be the managing director of a limited liability company, the collecting body has to start the procedure itself. The outcome determines whether social security contributions are due on your remuneration. That is a substantial sum in either direction, and it is far better settled at the start than discovered in an audit with arrears attached.

Second, your own income if you cannot work. A managing director who is ill is not paid by the company indefinitely, and the statutory sick pay rules written for employees may not apply to you in the way you assume. Daily sickness benefit and occupational disability cover are personal contracts, they are priced on age and health, and they get cheaper the earlier you take them out.

Broker or agent, and why it matters

German law distinguishes the two, and the distinction is about whose side they are on.

For a company owned from outside Germany the practical value of that is high. You cannot easily judge whether a German policy is good, whether the sum insured is realistic for your sector, or whether an exclusion matters. Somebody whose legal duty runs to you rather than to a product manufacturer is worth more than a small premium difference.

We introduce you to an independent broker, a Makler in the sense of § 59(3) VVG, not a tied agent, who works across the market and has put packages together for foreign-owned companies before. That is not the standard file, and it is frequently quoted badly by people who have not done it.

What to do, in which order

1. Notify the Berufsgenossenschaft within a week of starting operations. It is a statutory deadline, it costs nothing to meet, and it is the one people miss.
2. Get general liability cover in place before you need to prove it, before the lease, before supplier onboarding, before the first trade fair.
3. If you import, deal with product liability before the first shipment, not after. And set up supplier records that answer the § 4(3) question inside a month.
4. Put D&O in place when the company starts trading, not when something goes wrong. Cover written after the event does not respond to it.
5. Settle the Statusfeststellung early, so the contribution position is known rather than assumed.
6. Answer the application questions in writing and keep a copy, including the insurer's warning notice. § 19 VVG makes this the difference between a policy that pays and one that does not.
7. Review annually. Sums insured that were right for a company with no stock and one employee are wrong two years later, and under-insurance is discovered at the claim.

The recurring costs of a German company in the first year are in the formation cost calculator. The employer side of hiring is in hiring employees in Germany.

Questions

Sources

§ 43 GmbHG, liability of managing directors: gesetze-im-internet.de
§ 4 ProdHaftG, who counts as manufacturer, including importers into the EEA: gesetze-im-internet.de
§ 192 SGB VII, notification to the accident insurer within one week: gesetze-im-internet.de
§ 6 SGB VII, voluntary accident insurance for entrepreneurs: gesetze-im-internet.de
§ 7a SGB IV, status determination procedure: gesetze-im-internet.de
§ 19 VVG, pre-contractual duty of disclosure: gesetze-im-internet.de
§ 75 VVG, underinsurance: gesetze-im-internet.de
§ 823 BGB, liability in damages: gesetze-im-internet.de
§ 59 VVG, definitions of insurance agent and insurance broker: gesetze-im-internet.de
§ 61 VVG, duty to advise and to state reasons: gesetze-im-internet.de
§§ 15a, 15b InsO, duty to file and payments after insolvency maturity: gesetze-im-internet.de

Business Center Reutlingen provides administrative and organisational support and introduces you to licensed professionals. We do not give legal or tax advice, in Germany only admitted lawyers (Rechtsanwälte) and tax advisors (Steuerberater) may do so.

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