Why should you get a liability insurance (Privat-Haftpflichtversicherung) in Germany?
In Germany, you have the legal obligation to compensate anyone who you caused any kind of damage. As you are liable in an unlimited amount for any damages you cause, it is recommended to buy a personal liability insurance (Privathaftpflicht). Although the German word “-pflicht” means obligatory, it is actually not legally required to have a private liability insurance. The name originates from your legal obligation to replace any damage caused. You are liable with your whole fortune.
The German Privathaftpflichtversicherung protects you from the financial consequences of inadvertences, but also protects you against the legal expenses if someone wrongfully accuses you of damaging their property. It is not necessary to buy a policy for everyone in your family, in most cases your spouse is also insured, as well as your children until the completion of their first professional education (family policy).
However, the personal liability insurance does not cover any kind of damages: If you have a dog or a horse, for example, you need to buy a special type of liability insurance called Tierhalterhaftpflichtversicherung (meaning insurance for people who own animals) to cover damages that your animals could cause. Furthermore, if you own property there are special insurances to cover damages connected to it (fire, water damage to your tenants, etc.).