Insurance for self-employed persons & civil law partnerships [Gesellschaften bürgerlichen Rechts (GbR)]
Self-employed means: having to get insurance yourself! The same applies to freelancers. Otherwise, they will have no coverage.
Status: April 2022
Links
Self-employed persons’ liability for damages:
Section 823(1) of the German Civil Code [Bürgerliches Gesetzbuch (BGB)]
Accident insurance:
German Administrative Employers' Liability Insurance Association [Verwaltungsberufsgenossenschaft (VBG)]
Short-term disability benefits of the German Pension Insurance [Deutsche Rentenversicherung (DRV)] from the Artists’ Social Insurance Fund [Künstlersozialkasse (KSK)]:
Section 43 of Book VI of the German Social Code [Sozialgesetzbuch (SGB)]
Insuring props, event technology and other business assets
An artists’ inventory, including props and equipment, can only be insured through property insurance. 3 examples of claims:
- A puppet theatre’s car and all equipment and marionettes of three performances go up in flames in an accident. Because nothing was insured, the group can only ask for donations.
- A ventriloquist, a magician and a comedian have their microphones, amplifiers, merchandise, stage design elements, magic equipment and autograph cards stolen from a car. The damages will be covered by insurance.
- An event tent is destroyed in a storm. The insurance premium would have been EUR 600 per year, but replacing the tent costs EUR 50,000.
There are 2 variants for self-employed artists (including if in a civil law partnership):
- Special home insurance for artists which, in addition to possessions, covers props, equipment, etc., used for work
- Prop insurance either as an annual policy that may be extended or as short-term equipment insurance for a specific event or job
Features of a sample prop insurance policy:
- Policyholder: Artists, actors, comedians, theatre and event companies, musicians and other creative professionals
- Insured: Equipment and props at their replacement value (only fair value for electronics), i.e.,
- Analog props, such as costumes, chairs, trusses, instruments, stage elements, etc.
- Electrical props, such as instrument, lighting, sound systems, microphones, etc.
- Electronic devices, such as LED juggling equipment, photographic and film equipment, beamers, network systems, laptops, smartphones, etc.
- Transportable stages, tents with stage installations, circus trailers that do not have to be registered, etc.
- Insured risk: Damage during setup and removal, fire, including overvoltage, transport damage, burglaries, theft, vandalism, electronic damage, including loss of data and disaster damage (e.g. floods) at an additional charge
- Deductible: EUR 100, electronics EUR 150, tent EUR 1,000
- Coverage in: Germany, but may be extended to Europe or worldwide at an additional charge
- Premium: EUR 175 for EUR 10,000 of coverage
- Other provisions: Underinsurance waiver, i.e., the insurance company will also pay up to the total coverage in case of underinsurance.
Underinsurance:
The coverage should reflect the value of what is insured and may not come out of nowhere. If there is no underinsurance waiver, the following applies: If equipment worth EUR 100,000 is only insured at EUR 50,000 (50% underinsurance), the insurance company will only provide payments at this rate. In case of total loss, you will only receive 50% of coverage, i.e., EUR 25,000. This is why an underinsurance waiver is important.
Questions and answers:
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Are props also insured if kept in someone else’s storage facility? Or should this be reported separately?
Storage facilities should be reported to your insurance company. Props and equipment are insured anywhere, including backstage, in a vehicle or in a (lockable!) trailer. Multiple storage sites may be reported, such as winter warehouse or storage rooms. Take advantage of this.
Storage facilities should be reported to your insurance company. Props and equipment are insured anywhere, including backstage, in a vehicle or in a (lockable!) trailer. Multiple storage sites may be reported, such as winter warehouse or storage rooms. Take advantage of this.
Liability for financial loss
- Business liability insurance covers ‘false’ financial loss: consequential financial loss caused by property damage or personal injury, such as loss of earnings of an accident victim.
- Financial loss insurance covers ‘real’ financial loss: financial loss of third parties that is a direct consequence of negligence.
| Professional/business liability | Liability for financial loss |
|---|---|
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Most freelance artists don’t need liability insurance for financial loss. However, things are different when requesting funding for others, acting as an agency or organiser or advising customers. This insurance covers financial loss of third parties (e.g. principals and project partners) that is caused by mistakes such as:
- Not filing a funding application on time and leaving the principal without funds.
- Damaging the joint project by infringing personality rights or copyrights on the website.
- Being responsible for others’ inability to fulfil their contracts.
- Planning emergency escape routes incorrectly and forcing the principal to cancel the event.
In Germany, few insurance companies offer liability insurance for financial loss which must be adjusted to the specific activity and is relatively expensive. Such insurance should have coverage of at least EUR 100,000 and more is often necessary. Premiums depend on revenue, the activity and the coverage, but expect EUR 200 per year.
Legal insurance and its limits
Unlike liability and property insurance, legal insurance is not indispensable for self-employed performance artists.
Not included: Legal insurance for contractual disputes
Although it is often requested: legal insurance does not cover lawsuits against principals or organisers who won’t pay fees or fulfil other obligations. (Legal insurance for contractual disputes is only available to self-employed certified professionals, not to freelance artists.)
Coverage available to self-employed persons:
- Traffic violations and driver protection: useful when traveling often, e.g. on tour
- Real estate—only useful for owners, landlords or tenants of their own venue
- Insurance company disputes
- Special prosecution insurance—covers attorney and court fees in case of a criminal trial, unless you are sentenced for intent
- Legal insurance for contractual disputes involving auxiliary activities—while contracts involving the main activities cannot be insured, insurance may be provided for disputes with, e.g. leasing companies, because they represent secondary activities
- Claims management/debt collection—requires assigning claims to external service providers
- Insurance for disputes under private law—normally included in legal insurance for self-employed persons
Benefits include defence against and exercise of claims based on
- Compensation for damages
- Employment law
- Tax law (may be especially useful to self-employed persons)
- Before social courts
- Administrative offense or prosecution protection (e.g. when accused of tax evasion or subsidy fraud, unless you are sentenced for intent)
- Legal protection as a victim of a violent crime
- Data protection law (in court)
Your attorney fees (in accordance with the German Act on the Remuneration of Lawyers [Rechtsanwaltsvergütungsgesetz (RVG)]), court fees and, if applicable, the expenses of the opposing party will be borne. Legal insurance almost always requires a deductible.