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A business startup always entails a series of uncertainties and risks. Not everything can be insured against, but there are various ways to cover or at least mitigate potentially threatening risks.
Selecting the right insurance policies is crucial, and determining which insurance is truly necessary can be challenging. The required insurance coverage always depends on the specific field of business, the product range, the offered services, and so on.
Nevertheless, there is a basic insurance coverage that should be considered standard for (almost) all businesses.
Fundamentals
For founders and young entrepreneurs, insurances against events with significant financial consequences, which cannot be covered from one's own resources, are particularly important. For instance, if founders are unable to work due to illness or accident, or if the business incurs financial losses due to events like fire, burglary/theft, water damage, storm and elemental damage, machinery or IT failure, or liability claims from others, having the right insurance in place is crucial.
The Association of Insured Enterprises (GVNW) recommends the following as standard insurance coverage for businesses:
- Business Liability Insurance Reason: Liability for damages to third parties is indispensable in any business.
- Business Interruption Insurance Reason: Business interruptions (caused by fire, burglary/theft, water damage, storm and elemental damage, machinery or IT failure, or the failure of the telephone system due to lightning or overvoltage damage) can quickly result in threatening loss of earnings.
- Electronics Insurance Reason: Almost every business relies on IT components. When these fail, their irreplaceability becomes evident.
- Building and Contents Insurance Reason: Buildings and equipment typically constitute a significant part of a company's assets.
- Motor Vehicle Insurance Reason: A commercial vehicle cannot be registered without motor vehicle liability insurance. It is mandatory.
- Environmental Liability Insurance Reason: Many companies have oil or gas tanks, heating systems, etc., which always pose a high risk of environmental pollution.
Consideration should also be given to Legal Protection Insurance or Product Liability Insurance.
Personal Protection
On a personal level, founders should consider the following forms of protection:
- Unemployment Insurance This maintains the right to financial support (unemployment benefits) if the startup venture fails.
- Disability Insurance Disability insurance is often more crucial than accident insurance, as most causes of disability result from illnesses rather than accidents.
- Health Insurance Self-employed individuals, like all citizens, are obligated to secure themselves through either public or private health insurance. While employees receive sick pay during illness, self-employed individuals typically earn no income during this time, and this should be considered in illness coverage.
- Accident Insurance A crucial supplement to all other insurances is statutory and/or private accident insurance, which provides compensation if disability occurs due to an accident.
The brochure "GründerZeiten 05 – Versicherungen" by the Federal Ministry for Economic Affairs and Climate Action (BMWK) extensively explains various insurance protection options. A table aids in assessing specific risks for one's own business.
