What happens if your business in Germany stands still for three months tomorrow? A fire, a major water leak, or a burglary can destroy machines or make sales rooms unusable. While Contents Insurance replaces the material damage, the clock ticks mercilessly on your running costs. Business Interruption Insurance protects what keeps your business running: your cash flow.
Key Facts at a Glance
| What is covered | Ongoing costs such as rent and salaries plus lost profit if your business comes to a standstill after an insured property loss. |
|---|---|
| What is not covered | Standstills without an insured property loss, for example due to illness, lack of orders or a pandemic, and periods after the agreed indemnity period. Details |
| Who needs it | For businesses that could not generate turnover for weeks after a fire or water damage but would still have to pay fixed costs. |
| What does it cost | It depends on your personal situation. I will gladly prepare a non-binding quote for you: get in touch. |
| What to look out for | A sufficient indemnity period (often 12 months), a correct sum insured based on gross profit and a combination with contents insurance. |
The Story of Martin: When the workshop burns, but wages continue
Fictional example for illustration; all persons and events are invented.
Martin runs a carpentry shop in Rheine-Mesum. Two years ago, the unthinkable happened: a technical defect in a suction roll triggered a smoldering fire during the night. The fire department was quick to arrive, but the soot and smell made the entire factory hall unusable for months.
His contents insurance paid for the damaged machines, but the renovation took almost half a year. During this time, Martin couldn't complete a single order. His revenue dropped to zero. But: the rent for the hall, the leasing rates for the vehicle fleet, and, most importantly, the wages for his five employees continued.
Without his Business Interruption Insurance (often also called Loss of Earnings Insurance), Martin would have had to file for insolvency. The insurance took over the ongoing fixed costs and also paid him for the lost profit. His employees stayed on board, and after six months, the carpentry shop was able to start up again in full. Martin says today: "The new planing machine was important, but the money for the salaries during the forced break saved my business."
What Business Interruption Insurance covers
Essentially, it's like "daily sickness allowance insurance for your company." As soon as an insured property damage (fire, water damage, storm/hail, burglary/vandalism) paralyzes your business, the protection kicks in:
- Continued payment of fixed costs: Rents, leases, interest, leasing rates, and insurance premiums.
- Continued payment of wages and salaries: So you don't lose your qualified specialists.
- Replacement of lost profit: As if the damage had never occurred.
- Coverage of additional costs: For example, for renting replacement rooms or temporary solutions to resume operations faster.
Which form is right for your business?
Depending on the size and industry of your company, there are different approaches:
- Small Business Interruption (SBI): Usually as an add-on to contents insurance. The sum insured often corresponds to the value of the inventory. Ideal for small offices or shops.
- Medium Business Interruption: A separate contract with more detailed determination of the sum insured based on your gross profit.
- Large Business Interruption: For manufacturing companies with complex supply chains and dependencies.
Important parameters in the consultation
As your broker with a market overview, I pay particular attention to two factors:
1. The Indemnity Period: This is the period for which the insurance pays. Is 12 months really enough to rebuild a burnt-down hall and get new permits? Often 18 or 24 months are the safer choice.
2. The Sum Insured: We work together to determine your actual gross profit so that no underinsurance occurs, which in an emergency would reduce the payout.
Risk-Check: What does a standstill cost you per day?
Calculate here what the financial consequences of a business interruption would be for your company. Continued fixed costs and lost profit are taken into account.
Rent, wages, interest, insurance etc.
Never underestimate the recovery time. Planning permits or specialized machine deliveries often take months.
Requirements for Expats
- German Business Registration (Gewerbeanmeldung or Freelance Tax ID)
- German Business Address
- German Bank Account (IBAN)
What Is Not Covered
Business interruption insurance protects your income, but only under certain conditions. Typical limits:
- No property loss: It only pays if an insured property loss, such as fire or water damage, causes the standstill.
- The owner's illness: If you yourself are unable to work, sick pay insurance or disability insurance helps.
- Indemnity period: Benefits end when the agreed indemnity period expires, even if the business is not yet running again.
- Official closures: Closures due to epidemics are usually only covered with a special add-on.
How I Help You in the Event of a Claim
As your broker, I am legally on your side, not the insurer's, and that matters most when something happens. This is how we proceed:
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1. Report it quickly
Let me know as soon as possible, by WhatsApp, phone, email or directly in the simplr app. Many policy conditions require prompt notification.
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2. Document everything
Keep photos, invoices, reports and the names of everyone involved. Good documentation speeds up processing considerably. How to write the claim report.
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3. Prove the loss
Record turnover before and after the loss and all ongoing costs. Your accounting records are the most important evidence here.
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4. I take care of the rest
I submit the case to the insurer, follow up and check the settlement. If the insurer refuses or cuts benefits, we look at the reasons together. What to do after a denial.