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Different businesses need different protection. Insurance for startups depends on their respective business field. An online business, for example, typically requires insurance coverage for cyber risks, while other companies need different types of insurance. Some insurance policies are recommended for all startups.
You can also hand over registration, admin and ongoing obligations: we take care of them in Company Formation & Admin.
Are Insurance Policies Mandatory?
Apart from statutory health insurance and registration with the competent trade association, no insurance is required in Germany. When founding a business, you should consider which business insurance policies are suitable for your company. The goal is to identify significant company-specific risks and protect them with appropriate business insurance.
Important! Research the coverage scope and premium calculation of individual insurance types in detail. Avoid under-insurance or over-insurance.
Where Can Major Damages Occur?
The risks for new businesses are numerous. It’s easy to imagine that a production stop or machine damage would be a major financial burden for a newly founded company. Nevertheless, it’s not advisable to insure all risks. Evaluate risks according to their impact (catastrophic, major, medium, and minor risks) and their likelihood of occurrence (frequent, rather rare, very rare) – in practice, your subjective assessment is usually sufficient.
Tip: Check from time to time whether your insurance policies still cover the risk.
What Types of Insurance Are There?
The most important business insurance types are:
- Commercial Liability Insurance: for damages claims from third parties, e.g., from customers, suppliers, visitors, and employees
- Directors and Officers Liability Insurance: for personal liability of GmbH managing directors and AG board members in particular
- Legal Protection Insurance: It covers costs resulting from legal disputes, such as attorney fees and court costs
- Business Contents Insurance: It protects your technical and commercial operational equipment, including all goods and inventory, against fire, burglary, natural disasters, and more.
- Electronics Insurance (Cyber Insurance): e.g., for costs of data re-entry and maintaining business operations after a virus infection.
Additional insurance types are available. In more complex cases, consult a specialist in the field. Always get multiple quotes and check if there are other ways to mitigate risks.
Where Can I Get Help Finding the Right Coverage?
The research process is difficult and time-consuming. Therefore, it may be advisable to seek professional help from experts – at nxt milestone, we have a broad network of independent insurance specialists. They are not bound to any insurance company and will find the right coverage for your business. Contact us and get a free consultation!
Book your free initial consultation now.
About the author
Stig Dreyer
COO, nxt milestone
Stig is COO at nxt milestone and takes care of operations, processes and IT. Before that he spent seven years as a consultant at Capgemini Invent.
nxt milestone has supported founders since 2020, with more than 1,200 companies founded so far. More about us
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