4.1 Cost planning and cost accounting
4.1 Cost planning and cost accounting
4.1.6 Insurances
Entrepreneurs must check which risks should be covered by insurance. The rule is
that an entrepreneurial risk is not insurable. As a self-employed person and
entrepreneur, the operational and personal risk must be insured. The risk is to
be held responsible for damage caused by accident, negligence, gross negligence
or even intent. As a rule, only accidental and negligent damage is insured.
Insurance cover is excluded if gross negligence or even intent is proven.
Business insurances are about damages that can occur, for example, due to theft, burst water pipes or negligence. In extreme cases, they can lead to the closure of the company. As a result, there could be failures in production or in the range of services, which has financial consequences. Company insurance also includes social security for employees, which the company has to finance.
With personal insurance, the loss of the individual's ability to perform is to be insured. It is often the most important capital. Especially in the first few years of setting up a business, a company is particularly dependent on the ability of the founder or owner to work. A sudden illness can endanger a business. The "greatest possible" risk should be insured.
The actual risks should be covered. Care should be taken to ensure that the costs remain reasonable. What is appropriate and necessary is to be determined in the concrete individual case.
When taking out insurance, it is important to find the right insurance provider. A price-performance comparison is relatively time-consuming, but should be taken into account. Contracts should have a reasonable (short) term and an annual cancellation option or contract extension.
Before taking out an insurance policy, information should be obtained from the industry or independent institutions such as the German Insurance Protection Association (DVS). Insurance companies provide calculations and costs of their insurances as offers. Price comparisons are absolutely necessary. Low insurance premiums and consistent loss prevention help save costs. Insurance companies grant premium discounts or refunds: e.g. for alarm, fire alarm, sprinkler or extinguishing systems; in case of non-claiming of insurance benefits.
Overview: Business insurances
Business liability insurance:
in the event of claims for damages by third parties, e.g. customers, suppliers,
visitors and employees.
Business interruption insurance (BU
insurance):
for running costs such as wages, salaries, rent and interest, etc., as long as
no income can be generated
Pecuniary loss insurance for company
directors:
for the personal liability of GmbH managing directors and AG board members in
particular.
Burglary insurance:
for damage due to theft, destruction, damage, etc.
Electronics insurance:
e.g. for costs of reusing programmes and re-entering data as well as
maintaining business operations after a virus attack.
Fire insurance:
by the owner for damage caused by fire, lightning strike, explosion or aircraft
crash
Motor vehicle liability insurance:
for damage to persons, property and assets caused by the driver to third
parties
Tap water insurance:
for damage caused by water leaking from water pipes or water or heating
systems.
Machinery insurance:
for repairs to stationary and mobile machinery caused by human error, operator
error, negligence, etc.
Product liability insurance:
for damages suffered by
third parties due to defective products (especially for manufacturers,
suppliers, licensees).
Storm insurance:
for storm damage to buildings and movable property
Environmental liability insurance:
for claims for damages if soil, water, air is polluted by the business.
Insurance for employees:
e.g. accident insurance, company pension insurance or new pension options
Fidelity
insurance:
for costs arising from embezzlement, misappropriation, theft, forgery, fraud
and other property offences
In addition to business insurance, entrepreneurs should insure themselves against personal risks. They can threaten the existence as a whole. This includes the
- Health insurance including family members and a daily sickness allowance to help alleviate loss of income,
- Accident insurance in the event that the entrepreneur is absent for a short or even long period (disability) due to an accident,
- Disability or occupational disability insurance in the event that the entrepreneur can no longer work at all or only partially.
- Life insurance to provide financial security for the family in the event of premature death,
- Old-age provision in the event of retirement. Various forms of investment are possible here. Investment in savings contracts, investment funds, real estate ownership, life insurance, private pension insurance.