Known in German as Haftpflichtversicherung, liability insurance refers to policies which protect the holder against claims by others.
What is liability insurance in Germany?
Liability insurance in Germany covers the cost of damages that policyholders cause to persons or objects. Because the German legal system holds individuals accountable for almost all damages, it is a very popular form of insurance for professionals like carers, tutors, and au pairs. It may also be taken out by students renting apartments, who are concerned about damaging the property of landlords or neighbors.
Car insurance is a common variety, providing some degree of protection should you become involved in an accident. As with many countries, car insurance is actually one of Germany's compulsory insurances, and every driver will need to be insured before they can hit the road.
However, there are other common forms. Many au pairs are advised to take out liability insurance when they arrive. That way, they can protect themselves against claims for damaged property at their host's home (which is bound to happen if employees aren't covered).
In Germany, renters can also be held accountable for damages caused to other people's property. So, if your washing machine leaks into the neighboring flat, you could be liable for repair costs.
The solution to all of these issues is a simple third party liability policy. Policies can be found for 80 EUR per year from some companies.
Tip: When you find a policy, check that it covers negligence (at least in common cases like causing water damage), as not all policies will do so.