Insurance: what is compulsory and what makes sense?

Two types of insurance are in the foreground: firstly, social insurance for the entrepreneur and for any employees, and secondly, business insurance.

Which social insurances are voluntary or compulsory for the entrepreneur depends on the chosen legal form.

Basically:

• Owners of sole proprietorships, general and limited partnerships are considered self-employed for social insurance purposes. They are largely responsible for their own provision.

• Owners of stock corporations or GmbHs are entrepreneurs and at the same time their own employees. They are therefore considered to be employed by the social security system. In this case, most insurances are compulsory.

Business insurance

Companies are freer with business insurance than with social insurance. In principle, a company can decide for itself which risks it would like to have covered.

Public liability

Public liability insurance is a basic requirement in practically every company. The risks differ greatly from industry to industry. A precise risk analysis is therefore advisable before taking out an insurance policy.

The following risks can be covered:

Investment risk: Damage resulting from liability as an owner or tenant of commercial real estate. Example: A brick comes off the company building and damages a parked car.

Operational risk: damage resulting from operational processes. Example: When replacing the washing machine, a fitter damages the kitchen equipment, which then has to be replaced.

Product risk: Damage caused by design or development errors in products. Example: A candle making machine component from your own product line causes overheating, which can lead to fires. Candle business insurance will cover all the damages caused by this accident.

In addition, various special risks can be included. On the other hand, the business liability does not cover the damage suffered by an entrepreneur or his family.

Members of the liberal professions such as doctors, pharmacists or architects can take out voluntary professional liability insurance. It covers your special risks in the exercise of your profession.

Property insurance

When it comes to property insurance, a distinction is made between building insurance and insurance for driving and driving (goods, machines, tools, computers, motor vehicles, etc.).

Entrepreneurs only have to take care of building insurance if they operate their business in their own property. Everything that is in the building is considered a vehicle. Property insurance generally covers natural hazards, fire, burglary and, in some cases, glass breakage. The coverage required can vary greatly depending on the industry.

Business interruption insurance

It covers the financial consequences of business interruptions (direct costs and lost profit). Business interruption insurance can be taken out for practically all risks and is particularly worthwhile for companies that have no alternative options for their production.

Tip: We also recommend taking out legal protection insurance. It covers the costs that arise from legal proceedings or the defense against unjustified claims.

Machinery and computer insurance

The machine insurance (or the general insurance for technical systems) covers damage to machines, apparatus, instruments and other technical systems that are the result of your own fault or that of third parties. Insurance solutions are also available for computer systems.

Insurance against health risks

Health issues are often underestimated, but they are critical to a business. So that bankruptcy does not occur and business can continue in an emergency, entrepreneurs must be insured for cases such as illness, accident, disability and death. The risk of incapacity for work due to illness can be covered by daily sickness allowance insurance (benefit duration of max. 2 years). Loss of work due to an accident is covered by the accident insurance.

In the event of disability, everything can get a little more complicated. It is possible to increase the benefits that are covered by the company's pension fund or, for example, to take out additional cover with private insurance. In the event of death, the same applies: Entrepreneurs who have a family to support should better cover themselves than young single people.