Private insurances for founders of a new business: prepared for all eventualities

If you break your foot, your health insurance will pay for your stay in hospital. If you buy a car, car insurance is required by law. And in the event of an accident, the accident insurance intervenes. If something happens, not only good advice is expensive. It is not uncommon for the entire existence to be endangered afterwards. There are special insurances for founders, which are more affordable at the beginning and which you should not do without under any circumstances. In this guide we show you which compulsory insurances you should take out if you want to start a business and avoid risks.

Note: Gender-sensitive language is important to us. Therefore, we use gender-neutral terms on this portal whenever possible. In addition, we switch to the generic masculine form. This explicitly refers to all genders (m/f/d). This procedure has only editorial reasons and does not contain any valuation.

Insurance for start-ups: What do you need as a private person??

In Germany, there are many ways to insure life, limb and various personal belongings. It makes sense in any case. Because if the worst comes to the worst, you have expert help at your side. What is normal in everyday life is unfortunately often underestimated in professional life. If you want to start your own business, there are personal risks as well as business risks. That's why you should think about insurances that protect you, your work and of course your company. Unfortunately, not everyone thinks this way and often tries to save money at the wrong end.

In the first step you should not think about your company, but about yourself. This sounds a bit contradictory, but in the end you are the company. The entire start-up stands and falls with you. All risks that affect you also affect your company. Especially as a freelancer you are also acting as an individual. Later you may employ people, then you are not only responsible for your health, but also for keeping their jobs. If something happens to you and the business has to close, both your dream of self-employment and the employment of your employees are over. You find this statement more than dramatic? Is it also! But this is the only way to see how important it is for start-ups to have insurances that actively affect themselves.

Health and nursing care insurance for start-ups

You have the choice of either statutory or private health insurance. You are not only required by law to have health insurance, even as a start-up entrepreneur. Health and nursing care insurance are also important insurances for companies as well as for employees. If you want to remain legally insured, the contribution rate is capped at 14.6 percent (since 2020). However, it is possible that the health insurance companies require an additional amount linked to your income.

Why should private health insurance be well considered??

Weigh carefully whether the step into private health insurance is really worthwhile for you or whether it is associated with too many risks. Not only financially. As a founder of a new business, you will not have the opportunity to switch back to the statutory insurance at a later date.

The statutory health insurance also functions as nursing care insurance. In 2022, the contribution rate is 3.05 percent if you have children. Without children, it increases to 3.4%.

Pension insurance

Many start-ups fall prey to the misconception that they are not covered by statutory pension insurance. This is not quite true. In fact, there are occupational groups that are obliged to pay into the statutory pension insurance despite being self-employed. These include:

  • Craftsman
  • Midwives
  • Teachers
  • Artist
  • Publicists

All other start-ups have the choice of either taking out voluntary insurance or applying for compulsory insurance. The contributions are capped. So you pay a maximum of 1283.40 euros (West) or 1.199,70 Euro (East). Of course, you can also increase your voluntary contribution up to a certain limit. The best thing to do in this regard is to find out from the German pension insurance fund what the current figures are and to what extent an increase would make sense for you. Advice would also be useful in this respect, because there are occupational groups that only have to pay contributions in line with their income or whose contributions depend on whether they are also members of the artists' social class.

Tip: Maybe a Rurup pension is worthwhile for you

The statutory pension insurance only covers the minimum subsistence level for start-ups. An additional insurance for private pension provision is therefore sensible. An option is the Rurup pension.

Unemployment insurance

If employees lose their job, they receive unemployment benefits – depending on the duration of the employment ALG 1 or ALG 2. This is not the case for start-ups. A voluntary unemployment insurance can be the solution for this risk. Within three months after the start of your self-employment, you can apply to the employment agency for such a voluntary unemployment insurance. However, only if you meet the following requirements:

  • You must have been employed for at least 12 out of 30 months beforehand and be subject to compulsory insurance.
  • Before you became self-employed, you received wage replacement benefits in accordance with Social Code III.

Important: If you are self-employed on a part-time basis and are, for example, in a part-time employment relationship that is subject to compulsory insurance, you cannot make the application. Because in this case, you are not only starting your own business, but you are already paying into the insurance through your other job.

Occupational disability insurance

For both employees and start-ups, BU is one of the most important insurances of all. Thanks to this insurance, you will receive a monthly pension in addition to the disability pension as soon as you can no longer perform your insured profession. This point is very important, because the reduced earning capacity pension really only takes effect if you can no longer perform any professional activity. Depending on the contents of the contract, occupational disability insurance takes effect much earlier!

Attention: The occupational disability insurance is linked to your state of health!

This means that you have to answer health questions when you take out the policy. And that down to the last detail. It can happen that certain pre-existing conditions and their consequences are excluded. In general, the sooner you take out BU, the cheaper it is and the higher the chances that the scope of insurance will be higher.

Artists' social insurance (KSK)

The Kunstlersozialkasse is an insurance for founders of a new business who practice a so-called freelance profession:

  • Medical professions
  • Legal, tax and business consulting professions
  • Scientific and technical professions
  • Language and information-providing professions
  • Graduate psychologists
  • Healing masseurs
  • Midwives
  • Full-time experts

Attention: The decision on whether you are practicing a freelance profession is, by the way, up to the tax office.

If you meet the requirements for KSK as a business start-up, you are automatically registered with the health, nursing care and pension insurance companies. Like an employee, you pay only half the premiums, but still get comprehensive coverage.

Professional pension funds

If you exercise an activity that falls under the heading of chambered liberal professions, you must insure yourself in the professional pension funds.

  • Doctors
  • Dentists
  • Veterinarians
  • Pharmacists
  • Architects
  • Notaries
  • Lawyers
  • Tax experts
  • Certified public accountant
  • Accountant

This is a compulsory insurance for those who start their own business. Pension schemes are similar to social insurance schemes.

Accident insurance for companies

No matter whether you are a freelancer or a company founder: Accident insurance via the employers' liability insurance association is one of the compulsory insurances for companies.

When is the professional association optional?

We recommend that you register with the professional association responsible for you. If you do not have any employees, you may have to take out private accident insurance as a start-up entrepreneur or take out voluntary insurance with the employers' liability insurance association.

Accident insurance makes sense in any case, because accident insurance supports you in the event of accidents at work or occupational illnesses. You can also find out which other insurances you should take out for your company in this article on the subject of company insurances.

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