Setting up your own company in a new country is definitely challenging. It comes with a number of challenges and risks, starting with your own and your employees’ finances. In order not to jeopardize them unnecessarily, there are various business insurances through which you can ensure your company against the financial consequences of certain events. This is so important because a single mistake during your professional practices or a hacker attack in your database can threaten its existence. As in your private life, you need to ask yourself the question: Should I bear the sometimes immense costs myself in the case of damage? If the answer is no, then you should ensure your business comprehensively.
This is precisely what company insurances protect against. They represent a bundle of different policies that according to the building block principle, interested parties can put together in a package depending on their activity. In order to adapt it exactly to your insurance needs, important questions would be: in which industry is your company active, whether the staff is employed, what is the subject matter of the insurance (Car, computer, machines), how much is the coverage amount, what is the scope of benefits, and finally choosing deductibles.
So what are there different insurances for the self-employed and companies? Which one makes the most sense and which ones can be skipped?
Foremost, we have on the one hand liability insurances, which steps in if a third party claims to suffer damages caused in the course of your commercial activities. You must know in Germany, both people, as well as companies, are always fully liable with no upper limits for damages they have exerted to third parties. Hence let's present you with an overview of solutions how to cover the most essential liability risks.
Corporate Liability Insurance
provides compensation for property damage, personal injury, non-pecuniary damage, and environmental damage caused by the policyholder or his employees. Just as every individual cares for private liability insurance, business owners should be sure to get business liability.
Pecuniary Loss Liability Insurance
covers for pecuniary losses to customers or clients caused by "professional negligence" (required by law in some cases). It protects the policyholder against real financial losses, which are not covered by corporate liability insurance.
Professional Liability Insurance
Insures freelancers against personal injury, property damage, and financial losses. Professional liability does not apply to the entire business but only to the individual within their specific trades. It is mandatory for some special professions, such as doctors or lawyers.
Environmental Liability Insurance
Supplements the corporate liability insurance by covering damages caused by negative environmental impacts (CO2 emissions, soil, water contamination) from your business. Germany has put in place some strict “green” measures that restrain polluting companies.
On the other hand, we have property insurances, which provide compensation for damages to your own business assets - buildings, machinery, vehicles. For example due to agents like natural disasters, theft, and functional failure. Because many of these self-inflicted damages can lead firms to ruin, there are multiple options to deal with the risks.
