As a GmbH managing director (Geschäftsführer), your situation looks nothing like a regular employee's when it comes to disability insurance. You're the engine of your company, and if that engine stops, there's usually no backup generator waiting in the wings.
This guide compares the three main ways to structure your Berufsunfähigkeitsversicherung (Disability insurance), puts real numbers on the tax differences, and flags the pitfalls you'll want to avoid.
New to Disability insurance in general? Start with our [complete guide here] first - this article focuses specifically on the GmbH managing director angle.
Why is disability insurance different for you?
Two things set your situation apart from regular employees:
No state safety net:
If you're a controlling shareholder (beherrschender Gesellschafter-Geschäftsführer, typically holding 50% or more), you're usually exempt from mandatory social insurance contributions. That sounds nice until you realize it also means: no Erwerbsminderungsrente. If you become unable to work, the state pays you nothing.
Even minority shareholders who do contribute to the system would only receive a fraction of their income. The average EM-Rente for new recipients sits at roughly €1,271 per month. For someone on a managing director's salary, that's not going to cover much.
Double exposure:
Your personal income and your company's success both depend on your ability to work. If you're out long-term, you lose your salary AND your business may struggle without its key person. Two problems at once, not just one.
The bottom line: BU insurance isn't optional for you. The real question is how to structure it.
Which model should you choose?
There are three ways to set up BU insurance as a GmbH managing director. Each has a different tax treatment during the premium-paying phase and, more importantly, during the payout phase when you actually need the money.
Useful benefits to look out for:
Most private liability insurances have a basic, medium and premium plan form. We recommend premium plans with a coverage sum of 50 or 70 million EUR as they are available for only a few euros extra, but offer much better coverage.
More benefits to look out for:
Credit default: If someone else has caused you damages, but is not insured and can't pay for the damages, you'd be left with the costs. Crodit default protects you from this situation
Condition update: New benefits that will be included in tuture plans by the insurance company, will also be included into your extsting plan.
Loss of apartment/work keys: Extends your coverage when losing keys to your rental apartment or your work keys.
Loss of keys from communal owners: Extends your coverage when losing keys of communal owner, e.g. the key to the basement of your apartment complex.
"Mallorca Deckung": Includes damages conser by you using other people's vehicles within
Stays abroad within & outside of Europe: Extends your coverage when outside of Germany. Most insurances cover stays abroad by default.
Rented things damages: Extends your coverage to damaged rented things.
Property damage (to rented property & objects): Extends your coverage to rented property and rented objects.
Loss of rented/borrowed objects: Extends your coverage in case of loss ofrented/borrowed objects.
Damages to movables of other people: Includes damages to other people’s rented,leased or borrowed movable property.
Damages when doing favours (“Gefälligkeitshandlung“): Extends your coverage when doing favours for other people.
Who is insured?
Most insurance companies offer different policies for single people, couples and families. Family plans cover for you and your (marriage-like) partner/wife/husband as well as children and other people living in your household (e.g. au pair). However, you need to be aware that in a shared flat things look different andevery roommate needs to take out insurance for themselves.
What about my pets?
Most insurances will also cover damages caused by smaller pets such as cats, hamster etc. because pet owners have to pay for the damages of their pets. But when it comes to dogs and horses, you will need a special “Tierhalterhaftpflichtversicherung”, which is mandatory in some parts of Germany (Berlin included).
Runtime – 12 Months:
Your contract will be automatically renewed for another year, if not cancelled 3 months prior to renewal date. However, should you leave Germany for good, all you need is to show your official "Abmeldung" in order to end your contract then and there.
What isn’t covered? The most important exceptions: