Insurance for Startups and Founders in Germany

Insurance for Startups and Founders in Germany

Author: Frederik Wulff / Markel

Anyone who starts a company runs a risk. These risks are normally shared among the entrepreneur and the investors, in return for which the profits are shared among them as well. In some areas, however, the entrepreneur does not have to bear the risks alone. Insurance companies are interested in taking over some risk, depending on the business model.

Types of Insurance:

First, one has to be clear about who will actually be protected by the insurance. Many products strongly focus on the protection of the entrepreneur. All types of insurance, from private liability insurance and household contents insurance to pension products and health insurance, are offered. In Germany, health insurance is obligatory for entrepreneurs. The issue is whether the entrepreneur has a choice between statutory or private health insurance as described later on in this brochure.

Next to the personal protection of the founder, the protection of the startup is crucial. This can be systematically divided into two areas. On one hand, there is third-party liability insurance and, on the other hand, there is insurance against first-party losses.

Finding the “Right” Insurance Company:

Definitive standard advice on the necessary insurance for an entrepreneur and a startup does not make sense. In contrast, expert advice is needed from a professional who understands not only the range of insurance products but also the risks of a startup. The entrepreneur or the startup must then decide what should happen on the basis of the advice they have received.

Particular caution must be exercised when mixing private and commercial insurance. This is highlighted by some providers as a particular advantage of certain products and is a common phenomenon with private liability insurance. However, a problem can quickly arise from using a mixture of private and commercial coverage.