insurances for freelancers in germany
Finance,  Expat Life in Germany,  Work in Germany

6 Ways to Stay Financially Stable as a Freelancer in Germany

Last updated on November 17th, 2022 at 01:22 pm

AKA how not to go broke as a business owner or freelancer in Germany. 😉 Here are some of my top recommendations for staying one step ahead of natural calamities, freak accidents, non-paying clients or sudden sickness. Some may call them necessary evil – but these essential insurances for freelancers in Germany can really keep you afloat in times of crisis. 



*Sigh*, I should’ve planned for it!

Every freelancer or small biz owner has had this moment at least once in their career. 

The whole idea of being a business owner is to be your own boss. You get to do what you want, for however long you want, who to work with and when. But the biggest blessing of being self-employed is also its biggest curse.

You are on your own.


five important insurances for freelancers in Germany


Self-employment tests your adulting skills to its limits. You are your own CEO, COO, CTO, CMO, CFO and what not. Wearing that fancypants CFO hat, you gotta make all financial and legal arrangements  – in case you are ever hit by an emergency.


Take a moment and think about what could happen in one single lifetime.

  • What happens if you are incapacitated for a long time by an illness or an accident?
  • What if you have burnout or a mental illness that prevents you from working?
  • Or when the economy suddenly takes a nosedive and clients start cost-cutting measures?
  • Or as is the situation now, the Coronavirus pandemic is causing a huge loss of income for freelancers and small businesses all over the world. 

Sure, there are Corona-Soforthilfe (emergency aids) for freelancers by the German state. But in normal circumstances, self-employed people in Germany have little or no entitlement to statutory benefits if they become unable to work. Therefore, the stakes are very high for them.


Here are five very important insurances for freelancers in Germany that can protect you from bankruptcy and tons of stress in the future.


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1. Personal Insurances


1.1) Freelancer Health Insurance (Krankenversicherung)


Let’s begin with the most essential insurance out there! Health insurance for freelancers is obligatory in Germany.

If you live in Germany, you must have health insurance – it’s required by law. If you are applying for a German visa, you won’t be able to get one without a valid health insurance plan.

Freelancers in Germany are no exception to this rule. Just like the salaried people, the self-employed can choose private or public health insurance.

In short, there are two health insurance systems in Germany –

  • the statutory (public) health insurance (gesetzliche Krankenversicherung) and
  • the private health insurance (private Krankenversicherung)


Read More: Health Insurance for Freelancers in Germany



1.2) Personal Liability Insurance (Privathaftpflichtversicherung)


Nearly 85% of the German population has personal liability insurance (Privathaftpflichtversicherung). So there must be a pretty good reason for this, eh?

Accidents can have huge financial consequences in Germany. 


liability insurance for expats in germany
Umm Bob Ross, say hello to…Germany!


If you ever end up hurting someone or causing any property damage, you have the legal obligation to compensate that party. 

Not only this. You can be held liable for an unlimited amount for any damages you cause. This means even a once-in-a-lifetime freak accident could potentially put you in a lifetime of debt.

Privathaftpflichtversicherung safeguards you; 

  • from the financial consequences of any unusual (or usual) accidents.
  • against any legal expenses if someone wrongfully accuses you of damaging their property. 


1. As a freelancer, you should absolutely make sure that you cover all your bases using comprehensive private liability insurance.

GetSafe is an expat-friendly private liability insurance provider in Germany. Not only they offer worldwide coverage, but you can cover yourself for up to €50m for just €5.93 / month. You can also cancel your contract anytime!

Click here to get a quote with GetSafe here.


2. If you are a dog owner, you need to buy a special type of liability insurance called Hundehaftpflichtversicherung or ‘Dog Liability Insurance’ to cover any accidental damages that your fur-child could cause.


3. Furthermore, if you drive a car in Germany, the risks from driving have to be insured separately with Kfz-Versicherung or ‘Car Insurance‘.


car liability insurance Germany
NOT INCLUDED – Protection against runaway washing machines


Related: All about Private Liability Insurance in Germany


2. Professional Insurances


2.1) Loss of Earnings Insurance (Verdienstausfallversicherung)


Any responsible freelancer in Germany should have a Verdienstausfallversicherung.

Verdienstausfallversicherung basically covers you financially during a temporary loss of income caused by an accident or long sickness. 

You should always treat this one as a basic necessity – simply to keep your finances stable and plannable under any circumstances. Major health-related disruptions are rare, but when they happen, they can easily cost a few months of income. 

There’s no reason to burden yourself with a financial risk when you can easily get yourself covered by an insurance company.

  • Verdienstausfallversicherung for freelancers with statutory health insurance:

Self-employed persons are free to decide whether they want to receive a sickness benefit from the statutory health insurance after six weeks of absence from work due to illness. In this case, they have to pay a monthly contribution depending on their profit.

Some optional tariffs also offer to pay sickness benefit earlier. It is also possible to take out additional Verdienstausfallversicherung, which pays out an individually pre-determined daily sickness benefit.


  • Verdienstausfallversicherung for freelancers with private health insurance:

Many private health insurance providers offer  Verdienstausfallversicherung for freelancers in Germany. However, as self-employed persons suffer a loss of income from the first day of an illness, it can be agreed that the daily sickness allowance is paid earlier, from day four of an illness.


Related: Health Insurance for Freelancers in Germany


2.2) Occupational Disability Insurance (Berufsunfähigkeitsversicherung)


Berufsunfähigkeitsversicherung (BU) is another very important insurance for any freelancer in Germany. Whether due to an accident or long term illness (and, it can happen very quickly) — you can one day find yourself permanently unable to work.

And just like that bye-bye self-employment!


What insurances freelancers in Germany need


If you suddenly become too disabled to work, your option will be either to live off on your personal savings or your life insurance. In these situations, Berufsunfähigkeitsversicherung is a life-saviour for freelancers in Germany.

In the case you are facing a permanent physical or mental disability, the BU pays a previously agreed monthly pension. This can help you maintain your standard of living and protect you against social relegation.

Private Berufsunfähigkeitsversicherung pays a monthly pension if at least 50% of occupational disability has occurred. This is paid until the end of the insured period or until the end of the occupational disability. The amount can be determined individually when taking out a policy.

There are many Berufsunfähigkeitsversicherung providers in Germany. However, you should pay attention to certain clauses when making comparisons online.

CosmosDirekt, for instance, offers immediate Berufsunfähigkeitsversicherung without any waiting period. You can calculate your monthly premium with CosmosDirekt here.



Difference between Verdienstausfallversicherung and Berufsunfähigkeitsversicherung

Verdienstausfallversicherung covers the loss of income and other damages caused by temporary health issues. The flu or a broken leg or something like that.  Berufsunfähigkeitsversicherung protects from a social and financial decline caused by long-term or permanent disabilities.
Pays a daily allowance plus whatever damages the policy covers. Pays a predetermined monthly pension, independent from the actual damage. In permanent cases insured receives a lifelong pension.
Covers temporary loss of income  Covers long term permanent loss of income








2.3) Professional Liability Insurance (Berufshaftpflichtversicherung)


In Germany, just like a private person, companies (businesses) can also be held liable for damages caused to an unlimited extent. Professional liability insurance is, therefore, one of the most important insurances for freelancers in Germany.

Berufshaftpflichtversicherung covers losses incurred by third parties in the course of business activities. Depending on the extent of the damage, this may well mean financial ruin for you or your company. Without a professional liability cover, that is!


Professional liability insurance for freelancers works in three ways:

  • Firstly, if damage occurs, the liability insurance for self-employed persons first checks whether the liability claim is actually justified — both in terms of the reason and the amount.
  • If the claim is justified, it will be covered by the liability insurance for self-employed persons and the entrepreneur will be saved from financial expenses.
  • If the insurer finds that the claim is wholly or partially unjustified, it protects itself from its customers. The professional liability insurance for freelancers rejects the claims and, if necessary, takes legal action.

In addition, liability insurance for freelancers fends off unjustified claims by any miffed clients.

Hiscox is an insurance provider specialising in professional liability insurance in Europe.

They insure freelancers, small and medium-sized companies with tailor-made coverage for their industries ranging from online shop ownersIT consultantmarketing agency owners to creatives such as bloggers or, freelance photographers and so on.


Read more about various types of professional liability insurance.


2.4) Legal Protection Insurance (Rechtsschutzversicherung)


Legal protection insurance (Rechtsschutzversicherung) protects you from unexpected legal costs. Just like the professional liability insurance, Rechtsschutzversicherung is also amongst voluntary insurances for freelancers in Germany as well.

But if you are one of those people who keep getting in legal troubles, then this one might be totally worth it.

With Rechtsschutzversicherung you pay a monthly premium to your insurer and oblige them to save your arse whenever you find yourself in the middle of a shitstorm — such as a dispute with your neighbours from hell, or when you leave a libellous review for a business or get in a car accident.




These are by no means just court fees. Legal expenses insurance also provides the following benefits:

  • Attorney’s fees
  • Compensation of experts and witnesses
  • Costs of the other party, if they are to be reimbursed
  • Prosecution bonds
  • Partly also for costs of mediation by a neutral third party to resolve the dispute without legal proceedings

In a 2018 survey conducted by Roland Rechtsschutzversicherung, a leading professional liability insurance provider in Germany, only 27 per cent of those surveyed stated that they had been involved in one or more court cases in the last ten years – either as plaintiff, defendant or witness.

Legal protection insurance by GetSafe covers unlimited financial costs of legal disputes. With Getsafe, you also get free of charge first consultation session with a lawyer.



3. Emergency Funds


Everyone should have an emergency fund. But it’s even more important for freelancer and business owners, who generally have limited entitlement to state benefits. No amount of insurances for freelancers in Germany will do for you what your private emergency funds could do.

Basically, an emergency fund is money tucked away in a current or savings account that you can access immediately. But it’s set aside for…emergency situations.

When I started to freelance in Germany a few years ago, one of the most important things for me was that — in emergency situations —  I should be able to manage and survive dry months without depending on anyone or any insurances or pension funds.

There was no specific monthly amount set for my emergency funds. I just saved a lot during the good months and whatever I could during the not-so-good ones.


But how can you start building up an emergency fund?

A general rule of thumb is to have at least enough to cover at least three to six months of household expenses like rent, groceries, insurance, utilities, phone, medications, etc. However, you should also consider the following:

  • What other financial resources do you have in case of an emergency?
  • Can your significant other support you if needed?
  • Are your close family members willing/able to help if needed?
  • How many people depend on you and your income?

You can set aside a small % of whatever you earn towards your emergency funds. It’s easy to set automated monthly payments with most bank accounts.

Freelancers in Germany can easily open online business bank accounts with Qonto or Kontist or Fyrst.

These modern mobile banks offer super easy and convenient online banking options at very minimal monthly rates (or even for free!). Another BIG plus is that they also have UI in English which makes it easy for non-German speakers.


Read: How to Choose a Business Account in Germany as a Freelancer (2020 Edition)


Many of us think of insurance as a necessary evil. However, for self-employed people, they are necessary to ensure a smooth day-to-day existence.

No matter how hard you work, as a freelancer, you cannot count on a steady monthly income. That’s why it is so important for your mental and financial well-being to have a backup plan.

Especially if you live in a foreign country (where you will not automatically qualify for any state benefits). As a responsible freelancer in Germany, get proactive and protect yourself from any shitstorm caused by unforeseen events.



So these are my tips for surviving potential financial disasters in Germany (or anywhere really!). Do you have any other insurances for freelancers in Germany besides the mandatory health insurance? Did I miss anything essential here? Please let us know your experiences in the comments below. 

Hi there, I am the human behind this blog. If you could not tell by my photo, I am fueled by tea. My expat journey started at the age of 19. Germany has been my home for several years. I hope you will find some helpful insights if you are considering moving to Germany or already live here.

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