Deduct public liability insurance as business expenses and save on taxes
7 Apr 2025
Katrin Straub
Managing Director at nextsure
A professional misstep can quickly become costly. Fortunately, contributions to professional indemnity insurance are often deductible as business expenses, reducing your tax burden. Find out here how you can benefit and what you need to consider.
The topic in brief and concise terms
Contributions to pure official liability insurance are generally fully deductible as business expenses, thus reducing your tax burden.
For combined contracts (public liability and private liability), the professional share must be proven to be recognised as deductible expenses.
If your total advertising expenses exceed the flat rate of 1,230 euros, it is worthwhile to itemize them, including official liability contributions.
Professional liability as business expenses: Understanding the basics
The occupational liability insurance, often also called public liability insurance, covers the professional risks of civil servants and employees in the public service. Contributions to pure professional liability insurances are generally fully deductible as business expenses. This applies when the insurance covers only professional risks. Such coverage is essential for many professions in the public service, such as teachers or police officers.
The clear distinction between professional and private risk coverage is important. Mixed policies that also include private liability components must be divided. Only the professional portion can be claimed as business expenses. The deductibility of insurances is an important lever for tax optimisation. This distinction is crucial for correct reporting in your tax return.
Practical examples: Correctly stating official liability insurance in the tax return
A teacher loses the master key to the school during a school trip, causing costs of several thousand euros for the replacement of the locking system. He can claim the contributions to his professional liability insurance as work-related expenses. Employees enter the contributions in the Schedule N of their tax return.
Another example: An administrative officer makes an erroneous decision that leads to financial loss. Here too, the professional liability insurance steps in, and the contributions are tax-deductible. Proper documentation and, if necessary, a certificate from the insurer regarding the professional share are worth their weight in gold. Different rules apply to private liability insurance. Correct allocation ensures you the maximum tax benefit.
Standard deduction for work-related expenses and individual evidence: What is worthwhile?
The tax office automatically considers a flat rate for work-related expenses of currently €1,230 per year for employees (as of 2023/2024). If your total professional expenses, including professional liability insurance, are below this amount, you do not need to submit individual proof. However, it is often beneficial to determine the actual costs.
The following costs may, for example, exceed the flat rate:
Contributions to professional liability insurance
Travel expenses to work (commuter allowance of €0.30 per kilometre for the first 20 kilometres)
Costs for specialist literature (often recognized without proof up to €110)
Expenditure on a home office under certain conditions
Costs for further education
Our expert tip: Collect all receipts and check whether your actual work-related expenses exceed the flat rate of €1,230. An exact breakdown can significantly reduce your tax burden. The connection between insurance and taxes offers potential for optimization here. This is how you can utilize all possibilities to reduce your tax liability.
Expert Knowledge: Legal Foundations and Recent Judgments on Public Liability
The deductibility of work-related expenses is regulated in paragraph 9 of the Income Tax Act (EStG). According to this, advertising expenses are expenditures for acquiring, securing, and maintaining income. Contributions to professional liability insurance clearly fall under this definition as they cover a professional risk. The Federal Finance Court (BFH) has repeatedly confirmed that contributions to professional liability insurance are deductible as advertising expenses.
A ruling by the BFH (Ref. VI R 11/18), for example, reinforces the deductibility when the insurance is necessary for professional practice. Please note that with mixed contracts, a clear separation of the professional portion is required, ideally through a certificate from the insurer. Knowledge of similar regulations regarding legal protection insurance can be helpful here. This ensures that the tax office recognises your statements without objections.
Design tips for civil servants: Secure maximum tax benefits with civil liability insurance
To make the most of your contributions to professional liability insurance for tax purposes, you should keep a few points in mind. Keep precise records of your insurance contributions and retain all receipts for seven years. Request a certificate from your insurer detailing the exact professional premium portion for combined policies. This evidence is crucial for the tax office.
Additional tips for optimisation:
Check annually whether your total work-related expenses exceed the employee flat rate of 1,230 euros.
Also declare smaller amounts for specialist literature or work materials if you exceed the flat rate.
Use tax software or the services of a tax advisor to take full advantage of deduction opportunities.
Inform yourself about specific regulations for your professional group, for example, as a civil servant regarding health insurance.
Our expert tip: A pure professional liability insurance without private portions is the easiest to claim as work-related expenses for tax purposes. This avoids allocation issues and ensures full deduction. With these strategies, you can maximise your tax return.
nextsure: Your partner for tailored insurance coverage
The correct safeguarding of professional risks is of great importance for civil servants and public sector employees. At nextsure, we understand the specific requirements and offer you tailored solutions in the field of professional indemnity insurance and other occupational insurances. Our digital processes enable a quick and easy conclusion. We assist you in finding the optimal protection for your professional activities, which also considers tax aspects.
Request an individual risk analysis now: Have your insurance situation checked free of charge and receive specific suggestions for optimisation.
More useful links
Wikipedia offers a comprehensive overview of advertising expenses (business expenses).
Gesetze im Internet contains the exact wording of paragraph 9 of the Income Tax Act (EStG) regarding advertising expenses.
The Federal Ministry of Finance provides the administrative guidelines for paragraph 9 EStG (advertising expenses).
The Federal Ministry of Finance includes an analysis of the tax changes for the year 2023.
Haufe offers a specialist article on paragraph 9 EStG (advertising expenses).
Justiz NRW presents a court decision from Düsseldorf regarding advertising expenses.
The Federal Fiscal Court offers a decision by the Federal Fiscal Court on advertising expenses.
FAQ
Was genau sind Werbungskosten im Zusammenhang mit der Amtshaftpflichtversicherung?
Werbungskosten sind Aufwendungen, die Ihnen durch Ihre berufliche Tätigkeit entstehen und der Erwerbung, Sicherung und Erhaltung Ihrer Einnahmen dienen. Beiträge zu einer Amtshaftpflichtversicherung, die dienstliche Risiken abdeckt, zählen dazu.
Benötige ich Nachweise für die Absetzung der Amtshaftpflicht als Werbungskosten?
Ja, Sie sollten Beitragsrechnungen oder eine Bescheinigung Ihrer Versicherung aufbewahren. Bei kombinierten Verträgen ist ein Nachweis über den beruflichen Anteil besonders wichtig.
Wie wirkt sich die Amtshaftpflichtversicherung auf meine Steuererklärung aus, wenn ich auch eine private Haftpflichtversicherung habe?
Der berufliche Anteil der Amtshaftpflicht kann als Werbungskosten geltend gemacht werden. Der private Haftpflichtanteil (oder eine separate Privathaftpflicht) kann als Sonderausgabe (Vorsorgeaufwand) bis zu bestimmten Höchstgrenzen abgesetzt werden.
Gibt es einen Höchstbetrag für den Abzug der Amtshaftpflicht als Werbungskosten?
Für reine Werbungskosten, wie die Beiträge zu einer ausschließlich beruflichen Amtshaftpflichtversicherung, gibt es keinen spezifischen Höchstbetrag, solange sie angemessen sind und nachgewiesen werden können. Sie wirken sich in voller Höhe steuermindernd aus, wenn sie den Arbeitnehmer-Pauschbetrag übersteigen.
Können auch Lehrer ihre Diensthaftpflichtversicherung als Werbungskosten absetzen?
Ja, Lehrer können die Beiträge zu ihrer Dienst- bzw. Amtshaftpflichtversicherung als Werbungskosten in der Steuererklärung geltend machen, da diese Versicherung berufliche Risiken abdeckt.
Was passiert, wenn ich vergesse, die Amtshaftpflicht in der Steuererklärung anzugeben?
Wenn Sie die Angabe vergessen und Ihre Werbungskosten dadurch unter der Pauschale bleiben oder niedriger ausfallen, zahlen Sie unter Umständen mehr Steuern als nötig. Eine Korrektur ist innerhalb der Einspruchsfrist oder unter bestimmten Voraussetzungen auch später noch möglich.
