Private Liability Insurance - Complete Guide

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Private Liability Insurance - Complete Guide


Last updated: 10 April 2020 / by Sam Williams

As you may have heard elsewhere, Germany is a very structured society and there is a marked fondness for structure and order. It may not, therefore, come as a huge surprise to learn that Private liability insurance is very popular.

A concept that is rising in popularity elsewhere, private liability insurance, is already widespread in Germany. Most of the population is covered by this type of protection, and not having it could leave you seriously out of pocket.

What is Private Liability Insurance?

In Germany, it is expected that an individual will take responsibility for any losses they cause.

Just as you might have dog liability insurance or car insurance to provide protection in the above scenarios, private liability insurance protects any losses you cause personally. This could be anything, from spilling your drink onto another person’s laptop to causing them injury by accidentally dropping something on their toe.

No matter how careful you are, mishaps can occur and this is where private liability insurance can help.

If you are new to Germany, it’s easy to underestimate the importance of this insurance. After all, how important can it be to take out cover to protect you against a liability claim? Before you push the item down to the bottom of your to-do list, just consider whether you have ever:

  • Gone out cycling
  • Accidentally bumped into someone in a shop
  • Had to apologize for something your child did
  • Tripped and fallen

All these situations have the potential to lead to a claim against you. If you don’t have private liability insurance and one of the above occurs, you could have a very big financial problem.

Just to put those answers into context, here are some examples of claims that could arise.

Example 1

A car stops suddenly on the road and you can’t stop your bicycle in time. Even if you are injured yourself, you may be held liable for the accident and for not leaving enough stopping distance. You will be responsible for the cost of getting the damage to the car repaired.

Example 2

Your child is playing soccer in a friendly match at the park. During the kickaround, your child mistimes a tackle and accidentally injures another player. After being taken to hospital, doctors confirm their leg is broken. With treatment, X-rays, doctors’ appointments and physiotherapy, the costs could quickly rack up. As your child caused the injury, you will be responsible for covering these costs.

Personal liability insurance also provides protection for any fraudulent or unfair claims which are made against you. The cover will ensure you are able to defend your case and fight any claims for liability where you were not to blame for the damage.

Understanding Liability in More Detail

While having private liability insurance isn’t a legal necessity, German law recognizes the existence of liability and defines what it is.

The German Civil Code, Paragraph 823, Part 1 specifies that if an individual either negligently or deliberately violates another person’s health, body, life, property, or freedom, then compensation shall be due for the resulting damage.

Therefore, if you do not have private liability insurance, you could end up with a hefty sum that you are legally obliged to pay.

The definition makes it clear that the scope of liability is far-ranging and not just limited to direct loss or damage.

Whoever causes the liability will be resulting from repairing the damage they have caused by paying appropriate compensation. There is no upper limit to compensation in German law.

There are many types of liability insurance that you will already be familiar with. Car insurance is one; if you hit another car in an accident, your car insurance will pay for the cost of repairing the other car. Think of private liability insurance in the same way; it covers you for any damage that arises from your actions (just minus the car!).

What Does Private Liability Insurance Cover?

The concept of private liability may sound daunting at first, but it is quite simple.

Let’s return to the individual who spilled a drink on the laptop. It’s fairly clear that damage to the laptop would be payable, but what if the laptop contained a file with valuable contract information that couldn’t be recovered?

If there were financial losses from this contract because of the information being destroyed, this liability would also be the responsibility of the person who dropped the drink. This is an example of an indirect loss that can arise under a private liability claim.

Therefore, the scope of private liability insurance has to be wide-ranging to cover the full extent of damage that can occur. Coya is widely regarded as one of the best providers for ex-pats, as they offer extensive cover backed by an English-speaking service.

Their private liability insurance includes:

  • Medical injuries caused by your accidental actions
  • Damage to property
  • Financial losses incurred
  • Protection against third parties who are uninsured
  • Cover for your spouse/partner and children
  • Cover for individuals who are temporarily part of your household, such as au pairs, providing they are not already covered by insurance

The definition of property belonging to another person includes items that you are renting and using, such as an apartment.

Coya also allows you to customize your policy by increasing the cover with optional extras. These include:

  • Cover for rental vehicles
  • Cover for drones
  • Cover when the damage has been caused by free assistance
  • Cover caused by an individual who is legally judged unable to be held responsible (known as tort)

Regardless of what level of Private liability insurance you opt for, the plan also includes an assessment of whether a liability has risen, including collecting evidence where necessary, and defense against any claims considered to be unjustified.

The terms of the policy clearly set out the types of activities which can lead to a valid claim.

Why Should You Have Personal Liability Insurance in Germany?

The law does not force Germans to take out personal liability insurance but despite this, the vast majority do. With around 85% of Germans opting for insurance, not being covered is the exception rather than the norm.

Of course, this does not mean you should take out insurance, just because everyone else has. But there are very good reasons to protect yourself from claims for damages and the consequences this could have on your personal finances.

German law makes it very clear that if you cause damage to another person or their property, you are liable. There is no limit to the damages that a court can award if they agree you are liable. This means that if you do not have insurance, you might find yourself facing an enormous bill.

Unlike some other countries, Germany expects people to pay for any damage they cause to others. Even if you are very apologetic and the damage was accidental, you will be expected to cover the full costs.

Therefore, even though the law does not enforce personal liability insurance, it is highly advisable to take it out. The burden of potential liability costs could end up crippling your finances if the worst occurs and you are not covered.

One other point worth mentioning: you may find it hard to rent a property in Germany without personal liability insurance. German landlords typically expect their tenants to be properly insured, and this means taking out the liability insurance they refer to as Privathaftpflichtversicherung.

How Much Can I Claim For?

If a claim for private liability arises, it will be valued depending on the losses which occurred, taking everything into account. This includes indirect losses as well as direct losses that occur.

There is a maximum sum insured on the policy of €30 million, which is the maximum amount payable in the event of a single liability. If there is more than one incident arising from the same cause, it will be treated as a single claim. Coya liability insurance is zero deductible, which means there is no excess for you to pay.

A small number of liability losses and damage are subject to restrictions on the claim amount. These are all clearly set out in the policy terms and conditions, but examples include a €5000 limit for damage caused to work colleagues/your employer.

If the liability arises due to gross negligence on your part, you may be liable to pay for part or all of the claim yourself. Gross negligence is defined in law as being different to ordinary negligence as it requires deliberate and reckless disregard for safety.

Ordinary negligence is covered by private liability and can include incidences of carelessness or lack of attention, which aren’t deemed to be willful or reckless. Each case of gross negligence will be considered on its individual merits.

What Is Not Covered Under Private Liability Insurance

Every case will need to be assessed individually to see if the circumstances meet what the legal definition of liability is. There are some areas that are more complex, such as when the damage is caused by a young child, as they may not be considered to be legally responsible for their actions.

However, the answer to this is not simple and different factors may be relevant, so should this occur, your insurer will be able to provide you with advice. You must not admit any liability until you have spoken to your insurer.

Coya offers differing levels of cover, and the top includes protection against damage from individuals who are not legally responsible. This could include young children, so there is a solution if you want peace of mind and full protection.

Aside from this issue, a private liability claim will not be paid out for:

  • Claims relating to the transfer of illness or disease
  • Damage caused by hunting, the use of unauthorized weapons or for using weapons to take part in offenses.
  • Claims arising from asbestos exposure or use
  • Damage which was caused intentionally
  • Claims relating to fulfillment of contracts
  • Damage caused by dogs or horses
  • Damage caused by your vehicle
  • Claims arising from motor-racing or horse-racing
  • Claims arising from wild animals or commercial agriculture

A full list of exclusions can be found in policy terms and conditions.

As an overall guide, however, a private liability insurance policy will carry out the general activities relating to your private, everyday life.

A Full Range of Cover

Insurance is essential while you are living in Germany, and even though it’s not legally enforceable, it’s strongly recommended.

Coya is one of well-suited to ex-pats as there is no tie-in period, it is 100% online and every transaction can be completed in English.

Coya has a range of other types of products if you want full protection. These include home contents insurance, dog liability insurance and bike/e-bike theft insurance.

Their website, app and policy terms are all available in English, and they offer English-speaking customer service too.

You can apply online for all types of cover in a matter of minutes, using a simple app.

Once you’ve made the payment, cover can start from the following day, providing reassuring peace of mind.

 Once you’re insured, you’ll have access to a digital dashboard with all your details, so if you ever need to make a claim, the process is just as easy.

Frequently Asked Questions

What is a liability?

A liability arises under German law when one person commits an act that causes loss or damage to another person. These losses may be direct or indirect, but the person who committed the act has a responsibility to compensate the victim for their losses. This responsibility is also known as a liability.

What is the meaning of private liability?

There are many different types of liability, such as professional liability, which occurs while carrying out the duties of your job.

Private liability is different; this term refers to any damages or losses which arise while you are engaging in your private and personal life. Private liability occurs due to your actions that cause loss, injury or damage to another person or their property.

Is Liability Insurance in Germany required by law?

Personal liability insurance is not required by law but around 85% of Germans have this type of cover. This is because there is no limit on the financial compensation that a German court can award, even if the damage was as a result of an accident. Therefore, to avoid potential bankruptcy from enormous legal costs most people opt to protect their finances with personal liability insurance.

Why do I need private liability insurance?

Under German law, if you cause loss or damage to another person or their property, you are responsible for compensating them. In short, you have a liability.

This can lead to payments of several thousands of pounds or more, and in the worst scenario could cause bankruptcy in an individual. A private liability insurance policy protects from this outcome be bearing the responsibility of paying the cost of any valid claim.

A private liability insurer will also contest any claims which are made against you, which they believe are not valid, preventing you from having to make unnecessary liability payments.

How to get Personal Liability Insurance in Germany?

Coya offers a fast and easy way to take out personal liability insurance in Germany. You can apply online in just a few minutes using their website which is in English. The terms and conditions are also provided in English. It is backed by English-speaking customer service too, so if you need help with anything, it’s simple

Do I need private liability insurance for my children?

Children can be a little accident-prone, so it is definitely a good idea to include them in your private liability insurance. Coya liability insurance offers the option to extend your policy to include the members of your household, including your children. Having everyone covered on a family private liability policy with Coya makes life much simpler.

What is the difference between public and private liability insurance?

Public liability insurance is a type of protection that business owners take out. This offers protection against claims which arise either on their business premises or while they are carrying their duties in your home, office or other location.

Private liability insurance does not cover commercial activity or duties but pays out for claims which arise due to the Private actions of an individual that occur during their everyday, private life.

How much can I claim for?

Providing the conditions for a valid private liability claim are met, you can claim up to the sum insured on the policies for most events.

With Coya, the sum insured is €30 million. There are a small number of incidents where there is a restriction on the total amount payable; these are set out in the policy terms.

What types of situations are covered by personal liability insurance Germany?

 If you cause damage or injury to another person or their possessions, personal liability insurance will usually cover the cost. This includes accidents and mishaps, and the cover extends to indirect losses, as well as direct loss. For example, if your suitcase accidentally rolled in front of a tram, causing an accident, many people may be injured. Furthermore, passengers on the tram may be prevented from traveling to work that day or have been late for appointments. As the individual who caused the accident, you would be liable for the costs of injuries, as well as the indirect cost of loss of work and appointments which were missed.

Is damaging my own laptop or other electronics covered in the in the insurance?

Coya Liability Insurance, like all other types of private liability insurance, covers damage to the property of others. This means if damages occur to your own laptop or electronics, you cannot claim on your private liability insurance. If you have home contents insurance, you may be eligible to claim for your damaged laptop or electronics on this, depending on the circumstances.

Get Protected Today

The idea of private liability may be new when you first arrive in Germany, but you’ll quickly begin to appreciate that it’s a subject that’s taken seriously.

Private liability insurance in Germany will provide valuable protection against any claims for loss, ensuring you do not suffer financially due to a mishap.

To find out more about what Coya offers and how to get covered: 

Private Liability Insurance - Complete Guide

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