Liability insurance: A must or an option in Germany?
18 May 2025
7
Minutes
Katrin Straub
CEO at nextsure
Is liability insurance legally required in Germany? Many people wonder if they really need one. This article explains when liability insurance is indispensable and what financial consequences may arise without it.
The topic in brief and concise terms
While private liability insurance is generally voluntary in Germany, it is vitally important due to the unlimited liability for damages (§ 823 of the German Civil Code).
For vehicle owners and in many federal states for dog owners, there is a legal obligation to take out a specific liability insurance.
Pay attention to a high coverage amount (at least 10-50 million euros) and important inclusions such as coverage for default on claims and key loss.
Quick Facts: The liability situation in Germany
Personal liability insurance is not mandatory in Germany. However, 48% of those surveyed in a poll consider it necessary, even without legal obligation. According to § 823 of the German Civil Code (BGB), anyone who causes damage to another must pay for it financially. Without insurance protection, this can quickly lead to financial ruin, as you are liable with all your assets. Nevertheless, around 17% of households in Germany do not have personal liability insurance. This type of insurance is often available for under 100 euros per year. There are, however, exceptions: For car owners and, in some federal states, for dog owners, a specific liability insurance is required. It is also mandatory for certain professions, such as doctors or architects, to have professional liability insurance. Since 2022, skiers in Italy must carry personal liability insurance.
Practical Examples: When Liability Insurance is Worth its Weight in Gold
An everyday mishap can quickly become expensive. Imagine you accidentally knock your friend's expensive smartphone off the table – we're talking over €1,000. Or as a cyclist, you cause an accident where someone gets injured and is off work for two weeks. Such personal injuries can easily result in claims worth five or six figures. Without personal liability insurance, you'd have to pay these amounts out of your own pocket. Another example: you lose the key to a locking system in a multi-family house. Replacing the entire system can cost several thousand euros. A good liability insurance covers personal, property, and financial damages, often up to a sum of €50 million. The cost for such protection is relatively low; individual tariffs are available from around €1.16 per month. Families can insure themselves for around €22.85 annually.
Expert Depth: Legal Foundations and Key Contract Details
The basis for liability in Germany is § 823 of the German Civil Code (BGB), which states that everyone is liable without limit for damages caused by fault. Private liability insurance is voluntary, but the term "liability" refers to the obligation to be liable, not the obligation to insure. When taking out a policy, ensure you have a sufficiently high coverage amount – experts recommend at least ten million euros, preferably 50 million euros. Many policies today offer coverage amounts of 50 million euros or more. Important coverage inclusions are, for example:
Gratuitous act damages (e.g., help with moving house).
Loss of others' private and work-related keys.
Rental property damage to rented living spaces.
Damage caused by children who are not legally liable (under seven years old, under ten years in traffic).
Claims for insufficient funds coverage: This applies when damage is caused to you and the perpetrator is unable to pay.
Also check if an extended stay abroad is covered; within Europe, this is often the case for an unlimited time. Our expert tip: Compare not just the price, but above all the benefits, before making a decision.
Special Cases: When Liability Insurance is Legally Required
Although personal liability insurance is usually voluntary, there are areas where the legislature mandates insurance coverage. The most well-known is the motor vehicle liability insurance. Without this proof, no vehicle may be registered in Germany. The minimum coverage amounts are set by law, for example, 7.5 million euros for personal injury. Another important compulsory insurance concerns dog owners. In six federal states (Berlin, Hamburg, Lower Saxony, Saxony-Anhalt, Schleswig-Holstein, and Thuringia), all dogs must have liability insurance. In nine other federal states, this applies at least to dogs classified as dangerous or so-called listed dogs. The minimum coverage amounts vary here depending on the federal state, often around one million euros for personal and property damages. Hunters are also required to have hunting liability insurance with minimum coverage amounts of 500,000 euros for personal injury and 50,000 euros for property damage. Since 2005, there has also been a mandatory insurance requirement for drones, which can often be covered by personal liability insurance.
Costs and benefits compared: Is the investment worth it?
The cost of a private liability insurance is low compared to potential damages. Affordable rates for singles start at just 1.54 euros per month. Families often pay only a few euros more. This contrasts with potential compensation claims, which can quickly amount to millions, especially in cases of personal injury. Even a bike accident caused by negligence, resulting in personal injury, can incur costs of 75,000 euros. The insurance not only covers the actual damage costs but also assesses the legitimacy of claims and fends off unjustified demands (passive legal protection). Many insurers offer policies with coverage amounts of 50 million euros or more, providing comprehensive protection. Considering that around 17 percent of German households forgo this protection, raising awareness of its benefits is crucial. A liability insurance is an investment in one's financial security.
Family and Children: Who is covered?
A personal liability insurance policy can often cover the entire family. Generally, spouses or registered partners are co-insured under the contract. Children are also typically protected under the parental policy. This protection for children generally lasts until the end of their first professional training (apprenticeship or degree), even if they no longer live at home. There is a particularity for children under seven years old (under ten years in road traffic): they are considered incapable of tortious liability and cannot be held liable for damages unless the parents have neglected their supervisory duty. Good family policies still include damages caused by children incapable of being held liable to prevent conflicts. Check the conditions of your contract carefully to ensure that all family members, including children in education, are optimally protected. In certain circumstances, au pairs or domestic staff can also be co-insured.
An overview of the key benefits of a good liability insurance
A powerful private liability insurance should cover a wide range of risks. The core benefits include covering costs for personal injury, property damage and financial losses caused to others. Additionally, the following inclusions are recommended:
Coverage Amount: At least ten million euros, ideally a flat rate of 50 million euros for personal injury, property damage and financial losses.
Default Cover: Steps in if you suffer a loss and the culprit cannot pay.
Key Loss: Covers the cost of replacing private and professional keys and locking systems.
Rental Property Damages: Covers damage to rented apartments and furnishings.
Favours Damages: Provides cover also for damage caused when offering voluntary help (e.g., helping with a move).
Children Incapable of Tort: Covers damage caused by children under seven years of age.
Stays Abroad: Offers protection even during temporary stays abroad.
Internet Risks: Some policies also cover damage caused by internet usage (e.g., unintentional spreading of viruses).
Some policies also offer a replacement value compensation for damaged items up to a certain age and value. It is advisable to check the specific terms and exclusions of your liability policy.
Common Misconceptions and What You Really Need to Know
Conclusion: Why Liability Insurance is Indispensable
More useful links
Wikipedia offers a comprehensive overview of liability insurance in Germany.
Wikipedia provides detailed information on private liability insurance.
Wikipedia contains interesting facts about motor vehicle liability insurance.
Wikipedia explains the Compulsory Insurance Act.
The Federal Statistical Office (Destatis) provides statistical data in a current press release.
The German Insurance Association (GDV) offers general information on the subject of insurance.
Statista delivers data on the ownership of private liability insurance in Germany.
The German Insurance Association (GDV) publishes statistics on business development in general liability insurance.
Another press release from the Federal Statistical Office (Destatis).
FAQ
Do I need to have private liability insurance as a tenant?
Legally, you are not obliged as a tenant. However, many landlords require proof of liability insurance to protect themselves against rental property damage. It is very sensible for tenants.
Are my children automatically included in my liability insurance?
Yes, children are usually covered by their parents' family liability insurance until they complete their first vocational training (apprenticeship/studies), even if they no longer live at home.
What does the claim default coverage cover?
The uninsured loss cover comes into play if a third party causes you damage, but they do not have their own liability insurance and cannot compensate for the damage from their own resources.
Does my private liability insurance also apply abroad?
Yes, as a rule, insurance coverage also applies during temporary stays abroad. Within Europe, this is often unlimited in duration; worldwide, it may be limited to certain periods (e.g., one year). Check the exact terms of your contract.
What is the difference between the obligation to be liable and the obligation to have insurance?
The "obligation to be liable" (§ 823 BGB) means that you are responsible for compensating for damages you cause to others. The "obligation to insure" means that the legislature requires the conclusion of certain insurance (e.g., motor vehicle liability insurance). Private liability insurance is usually a voluntary safeguard for the existing liability obligation.
Does the private liability insurance cover damages caused by my dog?
Generally, no. For dogs (and horses), you need a separate liability insurance for pet owners. Small pets like cats or guinea pigs are often covered in personal liability insurance.
