Liability insurance: A must or an option in Germany?
18.05.25
7
Minutes
Katrin Straub
Managing Director at nextsure
Is liability insurance legally required in Germany? Many people wonder whether they really need it. This article explains when liability insurance is indispensable and what financial consequences can arise without it.
The topic in brief and concise terms
Private liability insurance is usually voluntary in Germany, but due to unlimited liability for damages (§ 823 BGB) it is vitally important.
For motor vehicle owners and, in many federal states, dog owners, there is a legal requirement to take out a specific liability insurance policy.
Look for a high sum insured (at least EUR 10–50 million) and important inclusions such as cover for unpaid claims and loss of keys.
Quick Facts: The liability insurance situation in Germany
Private liability insurance is not compulsory in Germany. Nevertheless, 48 per cent of respondents in a survey consider it necessary, even without a legal obligation. Anyone who causes damage to another person must bear the financial cost in accordance with § 823 of the German Civil Code (BGB). Without insurance cover, this can quickly mean financial ruin, as you are liable with all your assets. Nevertheless, around 17 per cent of households in Germany do not have private liability insurance. This insurance is often available for less than 100 euros a year. However, there are exceptions: for vehicle owners and, in some federal states, dog owners, a specific liability insurance policy is required. Professional liability insurance is also compulsory for certain professional groups such as doctors or architects. For skiers in Italy, private liability insurance has been mandatory since 2022.
Practical examples: When liability insurance is worth its weight in gold
A everyday mishap can quickly become expensive. Imagine accidentally knocking a friend’s expensive smartphone off the table – the cost can easily exceed €1,000. Or, as a cyclist, you cause an accident in which one person is injured and is signed off sick for two weeks. Such personal injury claims can easily result in demands in the five- or six-figure range. Without private liability insurance, you would have to pay these sums out of your own pocket. Another example: you lose the key to a locking system in an apartment building. Replacing the entire system can cost several thousand euros. A good liability insurance policy covers personal injury, property damage and financial loss, often up to a sum of €50 million. The cost of this kind of cover is comparatively low; single policies are available from around €1.16 per month. Families can be insured from as little as €22.85 per year.
In-depth expertise: legal foundations and important contract details
The legal basis for liability in Germany is Section 823 of the German Civil Code (BGB), which states that anyone is liable without limit for damage caused through fault. Private liability insurance is voluntary, but the term "Haftpflicht" refers to the obligation to be liable, not the obligation to take out insurance. When taking out a policy, make sure the sum insured is sufficiently high – experts recommend at least ten million euros, ideally 50 million euros. Many tariffs already offer sums insured of 50 million euros or more. Important inclusions are, for example:
Courtesy damage (e.g. help with moving).
Loss of third-party private and business keys.
Damage to rented property in rented accommodation.
Damage caused by children without criminal capacity (under seven years old, under ten years old in road traffic).
Claims default cover: This pays out if you suffer damage and the person responsible cannot pay.
Also check whether a stay abroad is covered; within Europe this is often the case without a time limit. 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 private liability insurance is usually voluntary, there are areas in which legislators require compulsory insurance. The best-known is motor vehicle liability insurance. Without this proof, no vehicle may be registered in Germany. The minimum cover amounts are prescribed by law, for example EUR 7.5 million 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 be covered by liability insurance. In nine other federal states, this applies at least to dogs classified as dangerous or so-called listed dogs. The minimum cover amounts vary depending on the federal state; often this is EUR 1 million for personal injury and property damage. Hunters are also required to have hunting liability insurance with minimum cover amounts of EUR 500,000 for personal injury and EUR 50,000 for property damage. Since 2005, there has also been a compulsory insurance requirement for drones, which can often be covered by private liability insurance.
Costs and benefits compared: Is the investment worthwhile?
The cost of private liability insurance is low in relation to the potential damage. Affordable tariffs for singles are available from just 1.54 euros per month. Families often pay only a few euros more. In contrast, there are potential compensation claims that can quickly run into the millions, especially in the case of personal injury. Even a bicycle accident caused by carelessness that results in personal injury can incur costs of 75,000 euros. The insurance not only covers the actual damage costs, but also checks whether the claims are justified and defends against unjustified claims (passive legal protection). Many insurers offer tariffs with sums insured of 50 million euros or more, which ensures comprehensive cover. Given that around 17 per cent of German households forgo this protection, educating people about its benefits is crucial. A liability insurance policy is an investment in your own financial security.
Family and children: Who is also covered?
A personal liability insurance policy can often cover the whole family. As a rule, spouses or registered civil partners are co-insured under the policy. Children are also usually covered by the parents’ policy. This cover for children generally applies until the end of their first vocational training or degree course (apprenticeship or university studies), even if they no longer live at home. For children under seven years of age (under ten in road traffic), there is a special provision: they are regarded as incapable of negligence and cannot be held liable for damage unless the parents have breached their duty of supervision. Good family policies nevertheless also include damage caused by children who are incapable of negligence, in order to avoid disputes. Check the terms and conditions of your policy carefully to ensure that all family members, including children in education, are optimally protected. Au pairs or domestic staff may also be covered under certain circumstances.
A powerful private liability insurance policy should cover a wide range of risks. Its core benefits include covering the costs of personal injury, property damage and financial loss caused by you to third parties. In addition, the following inclusions are recommended:
Sum insured: At least ten million euros, or preferably 50 million euros on a blanket basis for personal injury, property damage and financial loss.
Uninsured loss cover: Kicks in if you suffer damage and the party responsible is unable to pay.
Key loss: Covers the cost of replacing private and business keys and locking systems.
Tenants’ property damage: Covers damage to rented homes and contents.
Goodwill damage: Also provides cover for damage you cause in the course of unpaid help (e.g. moving assistance).
Children below the age of seven: Covers damage caused by children under seven years of age.
Stays abroad: Offers protection during temporary stays abroad.
Internet risks: Some tariffs also cover damage resulting from browsing the internet (e.g. the unintentional spread of viruses).
Some policies also offer new-for-old compensation for damaged items up to a certain age and value. It is advisable to check the exact terms and exclusions of your liability policy.
Common misconceptions and what you really need to know
A common misconception is that private liability insurance always pays out. However, damage caused deliberately is generally excluded. Damage that you cause to yourself or to co-insured family members is also not covered. Another point: private liability insurance does not cover damage caused by the use of motor vehicles that require registration – this is covered by motor vehicle liability insurance. For dogs and horses, separate animal owner liability insurance is usually required, as they are not automatically included in private liability insurance. Many people believe that a low excess saves a lot of money – however, the difference in premiums compared with policies without an excess is often minimal, while in the event of a claim the full amount has to be paid. It is also not correct that every liability insurance policy automatically applies worldwide and without limit; the conditions for stays abroad vary. So make sure you find out exactly what is covered. For dog owners, it is important to know that the requirement for dog liability insurance is regulated differently depending on the federal state.
Conclusion: Why liability insurance is essential
Even though private liability insurance in Germany is usually not required by law, its immense importance in everyday life becomes clear. It protects against financial risks that arise from minor carelessness and can quickly become life-threatening. The cost of such cover is comparatively low at just a few euros per month. Protecting your own assets should come first. Careful selection of the tariff, with sufficient cover and important inclusions such as claims default and key loss, is crucial. At nextsure, we support you in finding the right cover for your individual life situation. Request your individual risk analysis now: have your insurance situation reviewed free of charge and receive concrete suggestions for improvement.
More useful links
Wikipedia offers a comprehensive overview of liability insurance in Germany.
Wikipedia provides detailed information on private liability insurance.
Wikipedia contains useful information on motor vehicle liability insurance.
Wikipedia explains the Compulsory Insurance Act.
The Federal Statistical Office (Destatis) provides statistical data in a recent press release.
The German Insurance Association (GDV) offers general information on insurance.
Statista provides data on 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
As a tenant, do I need to have private liability insurance?
By law, you as a tenant are not obliged to do so. However, many landlords require proof of liability insurance in order to protect themselves against damage to rented property. It is very sensible for tenants.
Are my children automatically covered under my liability insurance?
Yes, children are generally covered under their parents' family liability insurance until the end of their initial vocational training (apprenticeship/study), even if they no longer live at home.
What does receivables default cover include?
Uninsured loss cover steps in when a third party causes you damage, but they do not have their own liability insurance and are also unable to pay for the damage from their own funds.
Does my personal liability insurance also apply abroad?
Yes, as a rule, cover is also provided for temporary stays abroad. Within Europe, this is often unlimited in time; worldwide, it may be limited to certain periods (e.g. one year). Please check the exact terms of your policy.
What is the difference between the obligation to accept liability and the obligation to have insurance?
The "duty to be liable" (§ 823 BGB) means that you must compensate for damage you cause to others. The "obligation to insure" means that the legislator requires the taking out of a specific insurance policy (e.g. motor vehicle liability insurance). Private liability insurance is usually a voluntary safeguard for the existing liability obligation.
Does private liability insurance cover damage caused by my dog?
Usually not. For dogs (and horses), you need separate pet owner liability insurance. Small pets such as cats or guinea pigs are often covered by private liability insurance.
