These are the five insurances founders should rely on

Not every policy makes sense or is really necessary, but some basic insurances entrepreneurs should always have up their sleeve, an overview.

Germans are generally considered to be over-insured. As a people, they are said to be so careful that they take out insurance for every little thing, no matter how unimportant. There's no real proof of this, but people in this country actually spend a bit more on their insurance cover than in Europe. They spend a good 2,200 euros a year, while the European average is just over 1,800 euros.

That's a nice sum, but it only relates to private individuals. Entrepreneurs have to invest even more, because in addition to themselves, it is also important to protect their own business against risks as efficiently as possible. The options are many, but as in the private sector, the same applies here: Not every insurance needs it. These are the most important insurances founders should take out.

Business liability insurance

Liability insurance is an insurance policy that is essential for both private individuals and entrepreneurs. It covers a startup against all types of claims for damages arising from the operation of the business. Above all, it covers personal injury and property damage. For example, business liability covers a customer who slips in the store or water damage to surrounding offices.

Consequential damage resulting from mishaps is also covered here. If a business partner's laptop is accidentally damaged, the insurance can also cover the resulting IT costs, such as data recovery. Such cases are referred to as "non-genuine financial losses".

pecuniary loss liability insurance

"Genuine pecuniary losses", on the other hand, are those that arise when someone does not do their job properly. Classically, this happens, for example, with lawyers who give wrong advice or do not submit documents on time. But any other entrepreneur who, for example, costs his client money by giving incorrect advice can also be taken to court under certain circumstances. In such a case, the pecuniary loss liability takes effect. Depending on the type of company involved, it may make sense to have such a policy. An entrepreneur should always take out this insurance if his own business directly affects the financial interests of others.

Company legal protection insurance

Few things are as unpleasant as a legal dispute with former employees or business partners. Above all, such a thing is expensive; after all, lawyers and courts want to be paid. In such a case, corporate legal protection insurance can help. Similar to private legal protection, the insurer covers the costs of the proceedings. Since the situations of companies are often difficult to compare, founders should take an individual look at the areas in which a legal dispute could potentially arise.

Almost always relevant, however, is coverage in the event of a lawsuit against the company, for example from a business partner. However, authorities such as the tax office may also take legal action against a company if it suspects irregularities in tax matters. Ideally, company legal protection also protects against employees suing the company, for example if they believe they have been unlawfully terminated.

Business contents insurance

Anyone who maintains business premises should also take a look at an insurance policy tailored to this purpose. Simply put, it covers damage to the inventory. This usually includes damage caused by a storm or fire, but burglary is also covered. The insurer usually reimburses the original purchase price.

Various additional clauses can extend this type of insurance even further. Some policies, for example, also cover renovation costs that arise afterwards. For additional premiums, the insurance also steps in if income is lower during reconstruction. Whether this addition makes sense, however, depends very much on the individual situation.

Cyber insurance

Especially for companies that rely on a smooth IT infrastructure, some kind of cyber insurance is important.

How this is structured in individual cases can vary significantly. In most cases, however, it protects the company against hacker attacks, DoS attacks designed to cripple its own system, data espionage or cybercrime. As a rule, cyber insurance not only compensates for the damage caused, but also pays for the repair of the problems. This includes repairing the infrastructure - possibly even hiring temporary replacements - but also, depending on the policy, the cost of forensic experts, lawyers or even crisis PR consultants. Whether the full scope makes sense also depends on the size and external impact of the company.


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