insurance for expat freelancers in Germany
Finance,  Legal,  Work in Germany

7 Essential Tools & Insurances for Freelancers in Germany

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Do you wan to start your own self-employment in Germany soon? This article covers an overview of not only the most important insurances for freelancers in Germany but also some essential tools for your business.



Managing a business anywhere comes with a host of challenges. It’s even more complicated in a foreign country where you have to deal with an entirely new ecosystem.

On top of that, Germany is notorious for being a bureaucratic madhouse, at least within the expat community. There are nearly not enough user manuals to help foreigners navigate through the complicated German tax, insurance and rigid red-tape systems.


German bureaucracy
It’s raining…paperwork


However, if you look hard enough there are some expat-friendly service providers in Germany.

Here are some highly recommended essential insurances for every expat freelancer in Germany to make your personal and work life in Germany safe and stress-free.


Disclaimer: Some of the links below are affiliate links. This means I may end up earning a minimal commission from qualifying purchases.



Freelancer Health Insurance

Priority level: A Legal-Must Have


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


There are a number of private and public health insurance providers to choose from.

With public health insurance freelancers have to pay about 14%-16% of their gross monthly income. This makes it very expensive for low earning or early-stage freelancers (for very basic coverage at that!).

A lot of freelancers in Germany, expats or locals, prefer private health insurance since it is considered a cheaper option of the two. It is also possible to tailor your own plan to get the kind of coverage you want or need – something that is very difficult to find in statutory health insurances in Germany.



Personal (Private) Liability Insurance

Priority level: An Essential-Must Have


‘Shit happens is a globally accepted phenomenon. When something goes wrong, people in most cultures just shrug and chalk it up to an oops moment.

In Germany, there is no such thing as a mistake – only absolute personal responsibility (even if you are a doggo or a youngling). 😉


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


Germans tend to be very risk-averse. They feel more at ease when they’re cosily insured against some super bizarro misfortunes of life.

Without sounding like a fear-monger, if you ever hurt someone or cause any damage, you have the legal obligation to compensate the other 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. 

It is no wonder that nearly 85% of the German population has personal liability insurance (Privathaftpflichtversicherung). This insurance protects you from the financial consequences of any unusual (or usual) accidents.

Personal liability insurance also safeguards you against any legal expenses if someone wrongfully accuses you of damaging their property.

It is not necessary to buy a policy for every member of your family. In most policies, your spouse, as well as children, are also insured.


private liability insurance for expat freelancers in germany


However, personal liability insurance does not cover all kind of damages.

There are special insurances to cover damages to personal belongings in your home. This is also known as Hausratversicherung or ‘Home Content Insurance’.

So if you are confident that you truly have it in you to set a house on fire someday, it might be very well worth investing in a  decent Hausratversicherung.


House content insurance germany
Insurances & Germany – getting on like a house on fire


Coya, an expat-friendly private liability insurance provider based in Berlin has an English speaking customer service team so don’t hesitate to reach out to them if your German is not up to speed.


Click here to calculate your own personal liability insurance offer with Coya

If you have a doggo, you need to buy a special type of liability insurance called Hundehaftpflichtversicherung or ‘Dog Liability Insurance’ to cover damages that your fur-child could cause.

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


Professional Liability Insurance

Priority level: An Essential-Must Have


Liability insurance for self-employed persons is specially tailored to the needs of companies, self-employed persons and freelancers.

This is one of those insurances that you would need to assess internally. And very carefully.

Can your self-employment in Germany result in some kind of damage to your client (and other relevant parties)?  


liability insurance germany
If you’re a walking accident, then PUHLEEZE get professional liability insurance. TODAY


This type of insurance covers losses incurred by third parties in the course of business activities. In addition, the liability insurance for self-employed persons fends off unjustified claims.

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

Depending on the extent of the damage, this may well mean the financial ruin of your company (or you as a freelancer). Without a business liability cover, that is!


Business liability insurance in germany
Pictured here: freelancers without professional liability insurance in Germany


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.

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 owners, IT consultant, marketing agency owners to creatives such as bloggers or, freelance photographers and so on.



Click here to find a professional liability insurance cover for your freelancer business!


Legal Protection Insurance

Priority level: A Nice-to-Have


Legal protection insurance (Rechtsschutzversicherung) protects you from unexpected legal costs. Just like the above freelance liability insurance, this is voluntary as well.

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

business liability insurance for expats freelancers in germany
Else, just accepting your fate is also an option.


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 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

As mentioned above, it is voluntary insurance: the probability of being involved in a court case is statistically not particularly high.

In a 2018 survey conducted by Roland Rechtsschutzversichrung, 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.

GetSafe offers comprehensive private and professional legal protection insurance to expats in Germany starting from 17.79 Euros per month.


Click here to check out their legal protection plan (in English).

Business Bank Account

Priority level: A Nice-to-Have


If you become self-employed as a freelancer or sole proprietor, you can theoretically use your private account for business activities. However, this is generally not recommended, as you can quickly lose track of your private and business finances when managing your self-employment in Germany.



Another advantage of a dedicated business account is that you can get an overview of your business’ growth relatively easily and quickly on the basis of the account balance.

Many freelancers and sole proprietors also use the income surplus calculation for accounting purposes, which is similar in principle to the account balance. So from an accounting point of view, it is also a good idea to open a separate bank account when setting up your business.

There are a number of options available for freelancers in Germany.

You can choose a traditional bank with a vast national network like Postbank. Postbank is one of the best-known brick and mortar banks in Germany with branches in nearly every city. This certainly makes it easier to conduct day to day business for the old school self-employed people.

 Holvi - Einfach. Sicher. Papierlos.


But you may have an online business or simply prefer to do your transactions online? Well now that we’ve arrived in the 21st century, Germany has a host of online banks now.

Couple of many new online banks like Holvi or Kontist offer super easy and convenient online banking options for self-employed and freelancers in Germany.


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


Accounting and Invoicing Software

Priority level: A Nice-to-Have


Invoicing clients and getting paid regularly is one of the most essential parts of freelancing.


VAT Invoices for freelancers in Germany


You have three ways of writing an invoice to your clients in Germany (and anywhere):

  • Create it yourself in Word or Excel
  • Use an invoice template
  • Get an accounting tool

If you work with Word or Excel, you must ensure that all-important mandatory components are included.

The problem here is the consecutive invoice number. Word and Excel do not provide you with an automatic sequential invoice number. This can be objected to during a tax audit.

As a rule, a good invoice template contains all the important mandatory elements.


Download EU/ German VAT Invoices Here


The disadvantage, however, is that invoice templates are not automatically updated. If the invoicing regulations change, the template used is immediately out of date and no longer valid. In addition, an invoice template does not usually provide a consecutive invoice number.

As an alternative, you can write invoices using an invoicing program or accounting software. These tools not only automatically add the consecutive invoice number but are also always up-to-date with regard to legal regulations for writing invoices.

You can use the invoice templates automatically generated by the invoicing program. You can customise these templates with your company logo and adapt them to your branding. In addition, invoice software offers many functions to simplify the processes such as

  • Automatic offer and invoice creation
  • Getting paid through Paypal and other online services,
  • Integration with your business bank account,
  • Automatic generation of late fee templates (Mahnung), and
  • A number of email templates and auto texts
  • Basic to advanced bookkeeping features

Read my roundup of English invoicing and accounting software in Germany here. I’ve compiled some down to earth, simple to use programs specially developed for freelancers and businesses operating in Germany and the EU.



Online Tax-Filing Tool

Priority level: A Nice-to-Have


One way or the other, your tax-related documents have to get to your local tax office.

The only caveat is that the German tax system is not easy – definitely not for the self-employed people. So how do you know what “Finanzamt” needs from you?

Especially for a freelancer in Germany, there are a lot of moving parts that come need to come together. 

For many, filing a tax return is a tedious and above all time-consuming task. Even if you start on time and make the right preparations, the whole thing could still end in chaos.


German bureaucracy
And whatever the fuck is the Werbekostenpauschalbetrag, Kinderfreibetrag and Ehegattensplitting???



If you have decided to handle your taxes yourself – then good for you! Now you need to get an overview of how you have to report your profits to the tax office and which documents are important for the tax office.

In the good old days, people used to file their taxes by hand on little green forms. Today, it’s much easier: There are basically three ways to submit your tax return to the tax office:

  • by mail;
  • electronically;
  • You bring the tax return to the tax office yourself.

If you create your tax return with software, you can send it to the tax office electronically via the Internet directly from the software. This procedure is called ELSTER, which stands for ELektronische STeuerERklärung.

You can make it even easier for yourself to submit your advance VAT return, EÜR, or annual income tax declaration with just a few clicks directly from a dedicated tax filling tool for freelancers such as Sorted!

You don’t even need an Elster certificate – Sorted sends the VAT return directly to the tax office. In addition, you can manage all your invoices and expenses in one place and have an overview of your business finances at all times.

The UI of Sorted uses very simple English which makes it extremely helpful for expat freelancers who are uncomfortable with complicated legal or finance German terminologies.

This tool is also FREE for freelancers registered as Kleinunternehmer. You only need a paid account when you charge VAT to your clients. Read my full review of Sorted here.


Click here to sign up with Sorted and submit your German freelancer taxes effortlessly in ENGLISH


If you are severely technologically challenged AND can afford, then you can also hire a tax advisor who can help you file taxes every year. Read more about hiring a Steuerberater in Germany here.



So here are my top essentials that every expat freelancer in Germany should have in their toolkit. Did you have any other useful insurance for self employment in germany? What other products or services are a must-have for you? Let us know in comments below.


Important insurances for freelancers in Germany

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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