There are three main questions that the self-employed should ask themselves before they recklessly dismiss the topic of insurance:
1.) What are the risks of self-employment?
2.) How big is the possibility that this risk will also occur?
3.) How many costs is this risk associated with?
Those who work their way through their own company along these three basic questions can make a sensible selection of possible insurance policies.
Table of Contents
- 1 These insurances belong to the category of operational security
- 2 The self-employed should take out two types of liability insurance
- 3 Legal protection insurance is available for companies and for the self-employed
- 4 Cyber insurance, online shop insurance and hardware insurance are newcomers
- 5 The self-employed must also consider personal security
These insurances belong to the category of operational security
In practice, a distinction is often made between personal and company insurance. The difference lies in the reference value, because the operational security is often not tied to a person. The most important company insurances are presented in this article.
In addition to general company insurance, there are other special types of insurance that may need to be considered, depending on the industry. Burglary and theft insurance is for businesses, for example with a production facility, with stocks or a sales room a useful addition to insurance coverage. The so-called transport insurance is an important detail for transport companies because it guarantees them transporting goods on all routes away.
The self-employed should take out two types of liability insurance
The classic is the so-called company liability insurance, which is also known as business liability insurance. The regulation in the event of damage is simple: If a person suffers damage during a company task, the insurance pays for it. At this point it is particularly important to identify possible risks precisely and document them in the insurance policy.
The risks in a craft or industrial company are very different from those in an office. Pecuniary loss liability is a special form of liability insurance. This insurance is recommended, for example, to all those who work in an advisory capacity. If you were to give your clients the wrong advice that would cause financial loss, the insurance company of the same name would take over.
Legal protection insurance is available for companies and for the self-employed
The so-called legal protection insurance, which is also well known as insurance for private individuals, is available in two types: as insurance for the company or as insurance for the self-employed.
The insurance is then called either professional legal protection insurance or company legal protection insurance. Here, too, the same applies as for liability insurance: The legal protection risks that exist in the company or with the self-employed must be documented as precisely as possible so that in the event of damage there can also be an undoubted claim.
Cyber insurance, online shop insurance and hardware insurance are newcomers
These three insurance options are still quite new, but are seen as a reaction to increasing digitalization. Cyber insurance is intended to cushion the financial risks that can result from data loss or even a hacker attack. The basic requirement is a secure IT infrastructure. Otherwise the insurance does not apply.
The so-called online shop insurance, which is always useful when the company is active in e-commerce, is more specific in its details. In addition, it makes sense to choose an insurance provider who will step in if insured hardware is damaged. Smartphones, laptops and tablets as well as other electronic items can be insured.
The self-employed must also consider personal security
Securing the operation is one of the components that a self-employed person has to think about if he wants to put his company on a solid footing. Personal insurance is the second component that protects the self-employed person from getting into financial difficulties due to occupational disability, illness or even old age. Accordingly, these insurances are recommended:
the Disability insurance is necessary for every employee in order to close the pension gap that gapes between an early pension payment (due to occupational disability) and the usual income. In this context, the definition of occupational disability is important, because in terms of content it makes a big difference whether a self-employed person can no longer run his entrepreneur or is no longer able to work at all. The risk of becoming incapacitated for work is decreasing due to the digitization of work areas, but is still on average 25 percent.
The decision whether the Health insurance Should be of a legal or private nature, can best be drawn up with the help of a classic pros and cons list. But be careful: This list should not only represent a snapshot, but also look to the future. Private health insurance may currently appear to be a suitable solution, but this could look different after starting a family.
Then, however, it must be remembered that the way from private health insurance back to statutory health insurance is not possible without any problems. In order to cushion loss of earnings during the illness phase, sickness benefit or daily sickness benefit insurance is certainly worth considering.
For founders, a unemployment insurance represent a safeguard for the company. Anyone who takes out this insurance within two years of starting their own business and who previously had to be insured for at least one year can take out voluntary insurance. Otherwise there is no equivalent of unemployment insurance for the self-employed.
Whether the insurance is part of a Accident insurance is a useful component, depends on the industry and the individual risk that a self-employed person can face. It is possible to insure yourself within the framework of an employers' liability insurance association or through private accident insurance, which in any case goes beyond the benefits of the BG.
If you switch from being an employee to the ranks of the self-employed, you should ideally submit an application for continued insurance to the Rentenanstalt right away. Otherwise it can be comparatively cumbersome in the statutory one pension insurance to be included. It should be well known that this protection will not be sufficient for old age anyway. That is why it is important to secure income in old age through private pension insurance.