Stable position

Smart tradespeople plan ahead – right from the start. Of course, founders have their hands full building up their business. But security can't be postponed, otherwise it'll be over faster than it started.

This article is part of the special feature GründerNavi – for founders and young companies

Founders are primarily characterized by a good business idea – less often by ample financial reserves. That's precisely why insurance policies are essential . The less a company has in reserve, the better it needs to protect itself. The rule of thumb is: insure as little as possible, but as much as necessary.

And what is needed? Herein lies a misconception, because it's less about the probability of potential damage than many believe. What's crucial is whether a risk has the potential to ruin the business – should the rare event occur.

Prevention is better than cure

Therefore, the first priority should be securing against risks that threaten the company's existence . These can include devastating natural disasters or legal liability claims from injured parties. It's also crucial to plan for the possibility that the founder will be incapacitated for an extended period , for example, due to illness or an accident. The more financial reserves a business builds up over time, the better equipped it is to cover minor losses. However, only a comprehensive insurance policy can protect against truly significant risks.

First and foremost is business liability insurance . There's no way around it, because by law, the business is liable for damages it causes to customers, employees, or others. Thanks to the integrated legal protection function , the liability insurer defends against unjustified claims for damages. Legitimate claims are settled by the insurance company up to the sum insured. This sum insured represents the upper limit of compensation. It's not advisable to skimp on this, as legal liability knows no bounds. Tip: Business liability insurance often includes private liability coverage for the owner and their family at no extra cost.

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From business liability insurance to insurance against natural hazards

Business liability insurance covers damages to others – just like car liability insurance. Comprehensive car insurance is to your own vehicle what building and contents insurance are to a workshop: it covers damage to your own property . Besides the vehicle fleet, the greatest assets are typically found in the tools and workshop itself. Young businesses usually finance part of their operations with loans. Banks require collateral for these loans. Standard policies cover damages caused by fire, lightning, explosion, hail, storms (from wind force eight upwards), water leaks, or burglary.

For an additional fee, natural hazards such as snow pressure, earthquakes, and floods can be included. Coverage is also available against cybercrime and employee embezzlement. However, caution is advised: insurers' handling of pandemic risks has shown that only what is explicitly stated in the policy terms and conditions is truly covered. When in doubt, a look at the fine print is advisable.

checklist

Trust is good – control is better

When it comes to insurance, anyone taking over an existing business should be absolutely sure that the insurance company must be notified of the change of ownership. The buyer should also obtain the following information:

Concluded insurance contracts

• Are all the relevant documents available?
• Were all contributions paid on time?
• Were discounts granted and if so, for what?
• Tip: If the insurance contracts or terms and conditions are incomplete, ask the insurance company for a copy.

Scope of insurance

• Are all important operational risks insured?
• Is there any under- or over-coverage anywhere?
• Which risks are not covered?
• List of all insurance claims made in the last five years
• What risk provisions does the company have
• Tip: To avoid underinsurance, the insured sum (upper limit of compensation) should be calculated so that everything could be bought new on the day of the loss.

Documents

• Insurance policies
• Correspondence with insurance companies
• Proof of transfer
• Overview of risk prevention measures, such as fire protection, alarm systems, security personnel
• Tip: Keep the documents in a secure location, such as a safe or bank deposit box. This way, you can prove claims even after a fire.

Contact Person

• Predecessor
• responsible insurance intermediary (representative, broker)
• German Insurance Protection Association eV
• Association of insured entrepreneurs
• Tip: The important addresses belong with the insurance documents in a safe place.

Source: BMWK Unternehmensnachfolge , existenzgruender.de , Bund versicherter Unternehmer eV

CONCLUSION
Small print: A thorough review of the terms and conditions will prevent any unpleasant surprises in the event of a claim. If in doubt, consult an expert.
Insurance advisor They work neutrally and for a fee. They recommend, but do not broker, policies.
representative only sell the policies of one company and receive commission for the conclusion and support.
Real Estate Agent broker policies from various providers on a commission basis.
Well camouflaged: Neutral comparison platforms such as Check 24 are brokers and profit from commissions.
Needs check: With www.existenzgruender.de The Federal Ministry for Economic Affairs and Energy provides a checklist for insurance companies

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