Professional indemnity insurance

If you start to work in certain professions in Germany, you will be required to take out insurance against liability claims that may result from carrying out your activity. Such damage may include personal injury, material and property damage. This type of insurance is called professional indemnity insurance.

This applies to professions whose practice is associated with an increased risk of damage to other people. The obligation to take out professional indemnity insurance and other provisions, cases of damage, coverage levels, etc., are regulated differently for individual professions and also differently for individual professions in each federal state.

There is a federal legal basis for civil liability insurance for the following professional groups in particular:

• security guards in accordance with Section 34a(1)(4) of the Trade, Commerce and Industry Regulation Act (GewO)
• collection agencies in accordance with Section 12(1)(3) of the Act on Out-of-Court Legal Services (RDG)
• notaries in accordance with Section 19a of the Federal Code for Notaries (BNotO)
• lawyers in accordance with Section 51 of the Federal Code for Lawyers (BRAO)
• tax consultants in accordance with Section 67 of the Tax Consultancy Act (StBerG)
• auditors in accordance with Section 54 of the Public Accountants Act (WPO)

In addition to federal regulations, where appropriate, requirements may also arise from Land or professional regulations.

Some examples are:

• architects, for example, paragraph 1(9) of the Baden-Württemberg Chamber of Architects Professional Code (Berufsordnung der Architektenkammer Baden-Württemberg)
• pharmacists, for example, Article 18(1)(4) in conjunction with paragraph 59(1) of the Bavarian Healing Professions Code (HKaG)
• doctors, for example, Section 21 of the Professional Code of the German Medical Association (Muster-)Berufsordnung der Bundesärztekammer)
• engineers, for example Section 11 of the Lower Saxony Engineer Code (NIngG)

In addition, certain forms of companies may also be subject to insurance obligations.

Industrial third party insurance

Industrial third party insurance must be distinguished from professional liability. This covers the civil liability of the persons authorised to represent the undertaking and those in an employment relationship with the undertaking.

Property damage liability insurance

In addition, there is property damage liability insurance. This relates to damage to property caused by professional activity that does not directly result from personal injury or material damage.

The types of risks covered by compulsory insurance depend on the insurance in question.

• Professional indemnity insurance covers errors or negligence in the performance of professional duties or in the course of business.
• General liability insurance covers damages resulting from a tort or delict. This is a general right to damages for third parties arising from the performance of the profession or business activity).

Information on statutory compulsory insurance in other Länder can be found on the GTAI (Germany Trade&Invest) website, using the keyword Pflichtversicherung [compulsory insurance].