Investor`s choice Jul 03, 2020

Insurance for your company in Bavaria – protection in the event of damage

Just as private individuals insure themselves against all possible risks, companies must also ensure that they are adequately insured in the event of various types of damage. In addition to the conventional business insurance policies in Bavaria, specific risks may arise depending on the industry, which must also be covered. You can find out which insurance policies are necessary for companies in Bavaria and what you have to consider when looking for insurance in this article.

Types of insurance for companies

Companies need completely different insurance concepts to private individuals. This is due to the fact that, on the one hand, much higher sums have to be covered in the event of a loss and that, on the other hand, each company is exposed to different company-specific risks. This results in individual needs for each company which the insurance cover they take out should include. Regardless of the size of the company, the most important thing is that all the risks which may be particularly costly for the company or even threaten its existence, can be contained. Company insurance policies can be divided into two types:

  • commercial liability insurance, which protects the company from third-party claims.
  • insurance policies that cover the damage suffered by a company itself.

Which commercial insurance policies are appropriate for a company depends on the potential risks and the protection required. The most important business insurance policies that every company should take out are presented below.

Commercial liability insurance

In Germany, it is laid down by law that companies must be liable for damages caused to third parties. Therefore, these company insurance policies are a must for companies. They insure all damages to persons, property and assets caused by their own company. The company's liability insurance should provide additional cover for specific risks depending on the industry.

Business liability insurance

Business liability insurance is essential for a company. It is liable for any kind of damages that the company or an employee culpably inflicts on others as a result of the company’s business activities. This insurance therefore protects the company against claims for damages that threaten its existence. Individual risks should be included in the business liability insurance according to the sector and field of work. For example, environmental liability if a company works with environmentally hazardous substances or product liability for a company in the manufacturing industry.

Professional liability insurance

Professional liability insurance is a supplement to business liability insurance, which specifically protects individuals from third-party claims for damages while carrying out their work. It is particularly advisable to take out professional liability insurance if the profession is related to a service. There is a financial loss liability especially for consulting companies that represent third-party financial interests.

Directors & officers financial loss liability insurance

This company insurance is aimed in particular at managing directors of a GmbH (limited liability companies) and executive board members of AGs (joint-stock companies). More information on the different legal forms of a company can be found in our “Legal forms for company foundation” blog. When a company gets into difficulties, it is quite common for its managers to find themselves being held personally responsible. Usually, this also creates additional and increasing personal pressure. The financial loss liability insurance assumes the risk of personal liability in this case.

Insurance policies that protect the company in the event of damage

In addition to liability insurance, it is just as important for a company to take out the appropriate commercial insurance policies to cover damages it may itself suffer. After all, damage that is not sufficiently covered can quickly become a threat to a company’s existence.

Business content insurance

The business contents insurance is comparable to a private home contents insurance. This is because the policy insures the commercial premises and items. Business content insurance makes it possible to combine several classes of insurance against high property damage:

  • Burglary and robbery: Includes the loss, destruction or damage of the insured goods. It can also be extended to robbery on transport routes and vandalism after a break-in.
  • Burst pipe insurance: Damage caused by leaking water from the water supply or a defective sprinkler system is insured. Damage caused by flood or groundwater need a separate insurance policy.
  • Fire insurance: Fire, lightning, explosion, impact or crash of a manned flying object, its parts or cargo are covered.
  • Glass insurance: Damage to glass panes, shop window and door panes, glass blocks and wall mirrors due to breakage, including installation work and emergency glazing, is covered. Special agreements are possible.
  • Storm insurance: Damage to the insured items caused by a storm, including consequential damage such as damage to goods or destruction, is covered. Insurance protection against hail damage can be taken out additionally if required.

Individual insurance policies are recommended, as even supposedly minor damage can have dire financial consequences. The business contents insurance for companies in Bavaria covers the costs of repairs, replacement or restoration of destroyed or stolen furnishings and goods in the event of damage. The insurance company reimburses the purchase price. This therefore ensures that the business can adequately replace machinery, equipment and goods and that the business will not suffer further financial losses due to delayed production, temporary closure of the business or interruption of services. Even in the event of damage to the building, for example if locks are broken after an attempted break-in, the business contents insurance will cover the damage

Commercial building insurance

In the event of major damage or even complete destruction of the company building or a production hall, commercial building insurance protects your company against financial losses that may arise from the repair or restoration of the destroyed building.

Business interruption insurance

This insurance is one of the most important kinds of insurance for a company. If damage occurs which necessitates an interruption of business operations, this insurance covers companies in Bavaria. It ensures that wages, salaries, social security contributions and rents can continue to be paid. Business interruption insurance also covers the loss of profit. This insurance is linked to the aforementioned insurance policies and therefore covers damages caused by fire, storm or water for example.

Commercial legal expenses insurance

Misunderstandings and disagreements with suppliers, subcontractors and customers often necessitate bringing in professional support. The financial means for legal assistance or court costs incurred in the course of such disputes are covered by the commercial legal expenses insurance. In this way, the insurer protects the company from financial difficulties caused by a legal dispute.

Other useful types of insurance policies for companies in Bavaria

In addition to the essential insurance policies we have presented above, there are some additional insurances which, if taken out at the same time, represent a convenient safety net for companies in Bavaria.

  • Digitalisation is calling for more and more technology in companies. Since this technology is usually very expensive, there is also the risk of expensive damage. Technical insurance policies, such as electronics insurance or machinery insurance, cover unforeseen material damage to equipment, machinery or plants.
  • Likewise, the increasing reliance on technology also increases the risk of a hacker attack. Cyber insurance covers the costs of restoring and reinstalling the data as well as any loss of profit resulting from this attack.
  • It is advisable to take out motor vehicle insurance that combines insurance cover and servicing for a company’s individual vehicles or entire fleets. Transport insurance is useful for the additional protection of goods during transport.
  • Credit insurance covers payment defaults in the event of late payment or insolvency.
  • Fidelity insurance is recommended to protect against financial losses resulting from financial crime committed by company employees or other persons of trust.

Customising the company’s insurance coverage

Sooner or later, every company is confronted with damage to business equipment, legal disputes or liability claims by third parties. It is therefore important that they make sure the insurance cover suits their needs. They must analyse the potential risks and select suitable insurance cover based on this analysis. A company in Bavaria is only ready for all eventualities and has nothing drastic to fear in the event of damage if its insurance cover is adapted to its individual risks.

Please note that the insurance policies presented in the article are just some of the policies available. You can find out from an insurance broker which insurance policies are ultimately necessary and suitable for your company.

Infographic - Insurances for your company in Bavaria
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