Professional liability insurance in Germany

Professional liability insurance protects you financially if a client claims you made a mistake or acted negligently, causing them financial harm. It helps cover costs related to defending yourself and paying for damages if you’re found liable.

This insurance is essential for business owners, freelancers, and self-employed professionals who provide expertise or advice, such as consultants, IT professionals, and marketers. For some professions, like accountants and real estate agents, it may even be legally required.

Professional liability insurance typically covers:

Business Errors: If a client accuses you of a mistake that led to their financial loss.

Claims of Negligence: If you’re blamed for not meeting professional standards or for causing harm through inaction.

Legal Defense Costs: If you need to hire a lawyer to defend against claims.

Yes, professional liability and errors and omissions (E&O) insurance generally refer to the same coverage. Both protect you if a client claims you made a professional error. Different industries may use different terms.

A starting coverage amount of €3 million is advised, with options up to €10 million available, depending on business needs and risk level.

Yes, these insurances cover different risks. General liability covers bodily injury and property damage, while professional liability covers financial losses due to mistakes or negligence.

Yes, freelancers and business owners can generally deduct professional liability insurance as a business expense on their taxes.

Yes, many businesses benefit from having both types of coverage. Business liability covers physical incidents, while professional liability covers claims related to your professional services or advice.

Business liability insurance covers physical injuries and property damage caused by your business operations. In contrast, professional liability insurance covers financial losses due to errors, negligence, or mistakes in your professional services.