Legal protection, business liability, professional liability and financial loss insurance – who can keep track of it all? We show you which insurances are important for you as a freelancer in Germany and which ones you can possibly do without.
Freelancer insurance can get complicated
For employees, the topic of insurance is often quite simple: Health and pension insurance are handled through the employer and liability insurance is usually only needed for their private lives. But as a freelancer, you suddenly have to deal with a lot of insurance issues. You might ask yourself: Which health insurance should I choose, and do I need professional liability or legal protection insurance? After all, you want to be well covered, but you also don't want to overdo it and spend money on superfluous insurance. Here we give you a first overview of the topic.
Health insurance: Private or statutory?
When it comes to health insurance, the question is not whether you need it or not, because it is mandatory in Germany. As a freelancer, however, you can choose between private and statutory health insurance. For more information, see our article on freelance health insurance.
Accident insurance is voluntary for you. Unlike employees, you are not automatically insured against accidents at work. You can insure yourself voluntarily through a Berufsgenossenschaft (worker’s compensation board) or take out private insurance. This will also cover accidents during your free time and is therefore more sensible. Since the premiums for accident insurance for freelancers are not high due to their low-risk work (a few euros per month), you get important coverage for little money.
Pension insurance as a freelancer
Since you don't have an employer, you are not automatically covered by the statutory pension scheme (Deutsche Rentenversicherung) and company pension schemes are not an option for you. So it is your own responsibility to provide for your future. You have two options:
- Voluntary contribution to the statutory pension insurance: You can voluntarily pay into the Deutsche Rentenversicherung and also determine the amount of the contributions yourself within certain limits. Whether this makes sense for you depends on various factors, such as your previous pension insurance period.
- Private pension: You have many options here, for example a fund savings plan, life insurance or real estate. Private retirement planning is a broad field, and it can make a lot of sense to get advice on it.
Of course, a combination of different ways is also possible.
By the way: For some freelancers, there is an insurance obligation in the statutory pension insurance (Deutsche Rentenversicherung). So you should find out whether this is the case for you.
Occupational disability insurance as a freelancer
This insurance (in German: Berufsunfähigkeitsversicherung) is relevant for both employees and freelancers. It takes effect if, for example, you are unable to work for a certain period of time or even permanently due to illness. It compensates your lost income at least partially. While there is a reduced earning capacity pension from the statutory pension insurance for employees in such cases, it is not available for many freelancers. An occupational disability insurance is therefore particularly useful to cover you for this case. However, it is also somewhat more expensive and costs around 60-80 euros per month.
Professional liability or pecuniary damage liability
Professional liability insurance (in German: Berufshaftpflichtversicherung) is interesting for many freelancers who work in a consulting capacity in the broadest sense. For example, if you are an IT consultant advising a client on IT security, and you make a mistake, the result may be a serious security breach. The customer could demand compensation from you for the losses incurred in the event of a hack. Professional liability insurance is also known as pecuniary loss liability, depending on the insurer (in German: Vermögensschadenhaftpflicht), and will step in and cover the costs in this case.
By the way: For some professions, such an insurance is mandatory, for example for lawyers or tax consultants.
Professional liability insurance for freelancers covers financial losses incurred by your clients. If, on the other hand, someone breaks a leg in your office and demands compensation for pain and suffering, this is a case for business liability insurance - more on this in the next paragraph. You may also be able to add this as a module to your professional liability insurance. The costs are around 20-100 euros per month and depend on many factors, such as your risk.
Commercial liability insurance for freelancers not always necessary
Commercial liability insurance (in German: Betriebshaftpflichtversicherung) for freelancers covers personal injury and property damage. It applies, for example, if a client trips over a poorly laid cable in your office and demands compensation for pain and suffering, or if you accidentally damage your client's laptop. The insurance also covers damage caused by employees, in case you have any. If, on the other hand, you are a freelancer without your own office and rarely visit your clients, this insurance is probably less worthwhile. However, it is also somewhat cheaper and can be available for less than 10 euros per month.
Legal protection insurance for freelancers
Of course we wouldn't hope so, but it can happen that a dispute with a client or a third party ends up in court or that you at least need the support of a lawyer. Maybe it's not your fault at all, for example if a customer doesn't pay. Nevertheless, such a dispute costs not only time and nerves, but also a lot of money. Legal expenses insurance (in German: Rechtsschutzversicherung) makes sense for freelancers, because it covers these costs.
Whether it is worthwhile for you also depends on the type of work you do. You may be interested in a combination product that provides additional coverage for your private life. The cost of legal protection insurance can be around 25-30 euros per month.
Business contents insurance only makes sense if you have your own office
This insurance covers damages caused by water, fire, storm, a burglary etc. in your office and to your inventory. If you don't have your own office, but work with your laptop from home and everywhere, this insurance is certainly not one of your must-haves. But it is also rather inexpensive and usually costs only a few euros per month – depending on the value of the insured items.
Choose freelancer insurance carefully
Not for every freelancer the same insurances make sense. It depends, for example, on the type of work you do and how high your security needs are. One thing is clear: as a freelancer, you should deal with the topic of insurance differently than most employees. No matter what you decide in the end, it's best to inform yourself in detail and maybe even get some professional advice.
Please note: We have prepared this text to the best of our knowledge, but it does not replace legal or insurance advice.