Liability Insurance in Germany [Ultimate 2023 English Guide]
Updated: Jul 16
Protect yourself from financial ruin by taking the right liability insurance. Learn everything you need to know about liability insurance in Germany.
You are held liable if you cause harm to others intentionally or unintentionally. In such situations, liability insurance covers the costs of damage claims.
You need different types of liability insurance based on your situation.
Everyone living in Germany should have personal liability insurance
All car owners must have motor vehicle liability insurance.
Some types of liability insurance are mandatory, but all are highly recommended.
This is how you do it
Ensure you take private liability insurance as soon as you start earning after finishing your studies.
Depending on the rules in your state, taking "dog liability insurance" for your dog is mandatory.
Check regularly whether your liability insurance is still up to date and includes all important services.
Table of contents
Accidents are not planned. They are uninvited guests that can cause expensive damages.
The damages have the potential to bankrupt you. It could be as small as
you knocking over your neighbor's expensive flower vase
or your dog chewing on a friend's shoes.
Or they could be as big as you hit someone with your car causing them a permanent injury.
In all cases, you are liable for the damage incurred.
You can easily pay for some damages yourself. However, it becomes painful and expensive when someone is injured, for example, in a car accident.
Without good liability insurance, you will be financially ruined for years or bankrupt in the worst-case scenario.
What does liability insurance cover in Germany?
Liability insurance (Haftpflichtversicherung) covers the costs of damage that you (or a co-insured person) have caused.
The type of damage doesn't matter. It could be a personal injury, property damage, or financial loss.
Someone breaks an arm because of your actions.
The liability insurance company will cover the injured's treatment costs and compensation for their pain and suffering.
The property damage ranges from slightly damaged to absolutely destroyed.
In any case, you are liable to compensate the property owner.
Property damage could be
a vase you knocked over,
the laptop or TV you damaged,
or the water damage caused by you in your rental property.
If someone loses money because of your actions, you are liable to compensate them for their losses.
For example, someone misses an urgent appointment because you wrongly parked the car. As a result, they couldn't conclude an important contract. Hence, lost the profit or money on that deal.
In such a situation, your liability insurance policy covers the lost profit of the affected party.
Financial losses may also occur due to personal injury or damage to the property. For example, you injured someone, and they cannot return to their job.
Or you damaged a commissioned work in an art studio. Hence, you must compensate the selling price.
NOTE: Not all liability insurance covers every damage you are liable for. There are different types of liability insurance depending on the context in which the damage occurred.
Passive legal protection
Every liability insurance in Germany includes passive legal protection.
Under passive legal protection, your liability insurance provider protects you against unjustified claims made against you.
NOTE: You are not only liable for your actions but also if you violate your duty of supervision.
For example, you are liable for your car and pet regardless of fault.
It means that even if it is legal to keep an animal, it can still be dangerous for those around you. Thus, you are liable for any damage caused by your pet.
Similarly, you are liable for the operational risk of the car.
Personal liability insurance (Privathaftpflichtversicherung)
Everyone in Germany must have personal liability insurance.
Personal liability insurance covers the damages caused by you.
As discussed earlier, the damages could be big or small. But you are liable to compensate for the damages caused by your carelessness.
Private liability insurance covers you in many situations, including the ones that can bankrupt you. Hence, it's important to take a good personal liability insurance policy.
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Do I need separate private liability insurance for my family members?
No, you need only one personal liability insurance policy for your family. It also applies to unmarried couples living together.
If you have two contracts after moving in together, you can cancel the contract that existed for a shorter period.
Personal liability insurance also covers your children. Even when they are of legal age or temporarily living outside your place of residence.
In the following cases, your children must get their own personal liability insurance.
They have completed their vocational training.
They are married.
Motor vehicle liability insurance (Kfz-Haftpflichtversicherung)
You need motor vehicle liability insurance if you own a vehicle. German law requires all car owners in Germany to have car insurance.
The insurance pays for damage you have caused to other people and their vehicles. It also pays for roadside trees damaged in the accident and damage to crash barriers.
The statutory minimum sums insured in motor vehicle liability insurance are relatively low.
for personal injury - 7.5 million euros,
for property damage - 1.12 million euros,
and for financial losses - 50,000 euros.
Moreover, to claim the costs of damages to your own car, you must extend your vehicle liability insurance to include partial or fully comprehensive insurance.
You can learn more about car insurance and how to find a good one in our comprehensive guide on car insurance in Germany.
Find out more about car insurance in our guide
Check every year whether your car insurance is still the cheapest.
Pet owner liability insurance (Tierhalterhaftpflichtversicherung in German)
Horse liability insurance
You should consider taking horse liability insurance if you own a horse. Because you are liable to compensate for the damages caused by your horse.
For example, a kick from your horse can cause significant injury to a person. And you are liable to compensate the person for the treatments and other financial losses.
Similarly, if your horse gets startled and causes a traffic accident, you are liable for the damages caused - even when you lent your horse and didn't ride it yourself.
Thus having horse liability insurance makes sense.
Dog liability insurance
Similarly, you must pay for the damages caused by your dog. The damage could be a scratched parquet to a momentous bite.
In some federal states, it is compulsory to have dog liability insurance if you own a dog.
Moreover, almost every federal state requires dog owners to have liability insurance for dog breeds classified as dangerous.
Only in Mecklenburg-Western Pomerania are there no regulations on dog liability insurance.
The good news is you do not need separate liability insurance for small animals like cats or canaries. Your private liability insurance covers the damages caused by them.
What insurance protects builders (Bauherren in German)?
As the client, you are responsible for any damage that occurs on the construction site when building a house - even if you have hired an architect.
Some private liability insurance policies include a builder's liability (Bauherrenhaftpflicht). But the insured amount of the builder's liability is very small.
Thus, you should consider taking out a builder's liability insurance before starting the construction of your property.
The insurance contribution sum depends on the construction and insured sum. For example, the insurance costs more if you build the house yourself.
On top of it, you need coverage for the damages to the building structure. There are two ways to get good coverage.
Get a "Bauleistungsversicherung" or "Feuerrohbauversicherung" to cover damages to the building's structure.
Or get a "residential building insurance" (Wohngebäudeversicherung in German) instead.
We recommend taking "Residential building insurance" (Wohngebäudeversicherung) before starting the construction for two reasons.
It already covers "Feuerrohbauversicherung."
You need it after the construction.
So, as you move into your new house, the residential building insurance applies. And it insures your new building against storms and water damage.
Landlords, homeowner's associations, and owners of undeveloped land should take "Home and landowner liability (Haus- und Grundbesitzerhaftpflicht)."
If you are living in your house, personal liability insurance is enough.
For example, someone slips on the snow in front of the house as you didn't spread the sand. In this case, your liability insurance will cover the costs.
Frequently asked questions
Is liability insurance mandatory in Germany?
The following types of liability insurance are compulsory in Germany.
Motor vehicle liability insurance (Car insurance, in other words)
Dog insurance is mandatory depending on the breed and federal state you live in.
Other types of liability insurance are not mandatory, but we highly recommend getting one. They don't cost much and can save you from bankruptcy.
What are the types of insurance in Germany?
There are five major types of liability insurance in Germany.
Personal liability insurance (Privathaftpflichtversicherung)
Pet owner liability insurance (Tierhalterhaftpflichtversicherung)
Homeowners insurance (Haus- und Grundbesitzerhaftpflicht)
Car insurance (KfzVersicherung)
Residential building insurance (Wohngebäudeversicherung)
Do you need liability insurance in Germany?
Although only a few types of liability insurance are compulsory by law. But we highly recommend getting one.