Startups- Company formation

GREAT OPPORTUNITIES - GREAT RESPONSIBILITY

With the decision to become self-employed, you have seized a great opportunity. Not only in financial terms can self-employment lead to an enormous improvement. The inner satisfaction of building something of your own, of being your own boss, cannot be underestimated either. At this point we wish you much success with your venture! Nevertheless, a mishap can happen to anyone once in a while. If you already have employees, you cannot always supervise them. What can you do if customers do not pay? How can you provide for yourself without losing everything again in the event of insolvency? What happens if you are absent for a long time due to illness? As you can see, there is a whole range of points that need to be considered.

We would like to provide you with at least a brief overview of the most important areas. Of course, this cannot replace a personal consultation.

We are at your disposal for this.

BUSINESS RISKS

Corporate liability insurance

Corporate liability insurance is the most important of all commercial insurances. It is an absolute necessity for every business start-up. Corporate liability insurance covers damages caused by you or one of your employees to a third party. It also checks whether the claims for damages made against you are justified. All costs, up to and including any legal dispute that may arise, are then borne by the liability insurance. In addition to damage in which you or your employees actively harm others through an action (i.e. through "your doing"), a neglect of the duty to maintain safety on the road, for example, can also lead to damage with corresponding claims. Since there is no lump sum limit for claims for damages, the continued existence of the company can quickly be at stake in the event of a large loss. As a rule, sole traders and freelancers are also personally liable with their private assets.

Profit loss/ professional liability insurance

While corporate liability covers personal injury and property damage, as well as the resulting financial losses (e.g. loss of earnings), pure financial losses are not insured.

Causes of real financial losses can be, for example: Consultancy errors, incorrect information, missed deadlines, planning errors... A pecuniary loss liability insurance covers such damages. For most chamber professions (e.g. tax advisors, lawyers, auditors, insurance brokers etc.), the existence of such liability cover is a compulsory insurance and thus a prerequisite for admission. It is advisable for anyone who works in an advisory, planning, administrative or supervisory capacity.

Content/ Property insurance

Contents insurance is comparable to household contents insurance for a business. Anyone who runs their business on business premises or maintains a workshop or warehouse also has business equipment there that can be of considerable value. Regardless of whether it is office furniture, computers, machines, tools or supplies, it is always problematic if business equipment is damaged or lost, e.g. by fire or burglary. Even if you have purchased second-hand equipment, you will quickly face high costs if you have to buy new equipment. Contents insurance covers the costs of damage, repairs and, if necessary, new purchases within the scope of the risks you have chosen.

Business interruption insurance

If, as described in the contents insurance, your business has been the victim of an insured loss that paralyses or at least temporarily paralyses business operations, it may become problematic for you to cover your ongoing costs. Rent, leasing instalments, personnel costs, etc. continue to accrue and must be paid. Often, contents insurance already includes business interruption insurance in an amount corresponding to the insured value of your company equipment. It applies to the risks selected in the contents insurance. If it is foreseeable that your annual turnover will exceed this value, the sum insured of the business interruption insurance should be adjusted accordingly. An interesting alternative to the classic cover presented here can be personal business interruption insurance. Here, too, various property hazards are included as causes of business interruption. In addition, the absence of a company manager due to illness is also covered. Personal business interruption insurance is therefore also an alternative to daily sickness benefits - and can be claimed as a business expense for tax purposes.

Electronics insurance

Anyone who can fear high financial consequences from the failure of electronics should choose this form of protection. In the

Electronics insurance, electronic devices can also be insured against damage caused by incorrect operation, simple theft or carelessness, among other things. The more important a device or a group of devices is in a company (e.g. medical electronics in a doctor's practice), the more extensive the insurance coverage should be. In addition to the protection of the pure property damage to the insured things, an extension to accruing data recovery costs and software can also be agreed.

Machine insurance

Stationary or mobile machinery can be covered very comprehensively within the framework of machinery insurance. In principle, the scope of insurance is significantly more extensive than in content insurance and also includes, among other things, operating errors, overloading or damage to operating resources. The insurance cover can be adapted to the respective needs to a certain extent.

Transport insurance

Rarely do you show up at your customers' with empty hands. As a rule, you carry tools, machines, goods, etc. with you. If the items carried are damaged during transport or during loading and unloading of the transport vehicle, or if the van is broken into during a break and equipment is stolen, the protection of the transport insurance takes effect. Some of the equipment of sales vans or trailers (e.g. cash registers, deep fryers...) that are not permanently attached to the vehicle can also only be covered by transport insurance.

Legal protection insurance

Legal expenses insurance is a useful supplement to business liability insurance. Legal disputes are part and parcel of business life. Claims for damages that you want to enforce yourself or disputes with a former employee whom you terminated - legal protection insurance helps. Many insurers now offer debt collection management options for their commercial clients. This saves you time and hassle with defaulting customers and frees up your mind for your actual work. Depending on the tariff you choose, your private risks can also be covered.

Cyber insurance

Cybercrime has unfortunately long become an integral part of our society. The media now regularly report cases in which large corporations have been hacked, But small and medium-sized companies are also popular targets for attacks, as their data is usually less well protected or not protected at all. Protect yourself accordingly against such attacks. The liability claims against third parties resulting from the misuse of data can be covered. But also the financial consequences that your company suffers, e.g. through a case of ransomware or similar, can be covered. Modern protection for the modern times we live in.

PERSONAL RISKS

However, in addition to covering your business risks, you also need to think about yourself. As a rule, the self-employed are not insured through the social insurance institutions. Although voluntary insurance is possible in many areas, it usually makes little sense. Take care of your own insurance. This way you can make more targeted, more efficient and often cheaper provisions.

Health insurance

When you become self-employed, you can basically decide whether you want to take out private or statutory health insurance. Switching to private health insurance gives you, as a self-employed person, the opportunity to insure yourself with better benefits and possibly also with lower premiums. In addition to your individual benefit wishes, your personal family situation must also be taken into account in order to find the right insurance cover. Since you do not have an employer, you no longer enjoy continued payment of wages in the event of illness. Taking out daily sickness benefit insurance is therefore highly recommended in any case. After the agreed waiting period, you will receive the agreed daily rate, as long as there is no enrichment of your income.

Disability insurance

Your working capacity is the basis for your standard of living. If you can no longer do your job due to health problems, this often goes hand in hand with a social decline. Depending on the type of illness and a person's ability, it is often not possible to change to another job. Occupational disability insurance is an ideal solution to provide income replacement in the event of an eventuality. The insured pension should be chosen sufficiently high so that one can also financially cover one's everyday life. The term of such a contract should also be coordinated with the desired retirement age. If such a contract already exists, it should definitely be reviewed. Is the pension amount still sufficient? Do the terms and conditions offer acceptable regulations for the self-employed? Has the insurance cover also been checked from a tax point of view? There is a whole range of points to consider as a self-employed person. In any case, occupational disability cover is one of the most important insurances you can choose for yourself.

Accident insurance

As a self-employed person, you can take out statutory accident insurance voluntarily through the employers' liability insurance association. However, this is not usually recommended. Accident insurance cover is better and more comprehensive through private accident insurance. This is the only way to receive benefits from the first percentage point of disability. In addition, you can base the amount of the compensation payment on your estimated needs - and only in this way can you receive a lump-sum payment at all that is sufficient for rebuilding measures and necessary special purchases that arise in the course of a disability acquired as a result of an accident. Treatment costs, pensions in case of occupational diseases, etc. can also be covered more specifically and better through other lines of insurance than through the employers' liability insurance association.

Dread Disease / Serious Disease Prevention

A serious illness does not always automatically lead to occupational disability. However, it almost always means that you have to take it easy for a longer period of time. Especially if you are self-employed and your income is directly related to the work you do, a few months of working only a few hours a day can quickly mean a noticeable loss of income. A provision for serious illness pays out an amount determined by you when one of the insured illnesses is diagnosed. This payment is made once. In addition to being used to compensate for loss of income, the lump-sum benefit can also be used, for example, to compensate for the costs of a temporary manager.

Retirement provision

Retirement provision is a topic that many self-employed people like to put off. The time until retirement seems so long that there are still a few years left to deal with it after all. Often enough, the result is that even successful self-employed persons have only very small reserves from which they then have to spend their retirement. With the introduction of the basic pension, self-employed people have been given a very good means of providing for their old age. Here, even very large savings contributions can be taken into account for tax purposes. Even in the event of insolvency, capital in a basic pension cannot be seized. Your money is therefore safe until you retire.

DO YOU HAVE EMPLOYEES?

Once you have employees, you also assume social responsibility to a certain extent. The regular payment of wages and salaries and salaries, compliance with safety regulations or the provision of necessary work equipment are a matter of course that your employees can expect from you. Good employees are increasingly hard to find - all the more important that they are loyal to the company. Voluntary social benefits are a simple and usually inexpensive means of binding employees more firmly to the company.

Company pension

You must offer employees at least one implementation path for occupational pension provision (company pension scheme). Since the contributions for this are usually generated via salary conversion, you and your employee save contributions to social insurance. Since the introduction of the Company Pension Strengthening Act (Betriebsrentenstärkungsgesetz, BRSG), you must pass on your savings (at least in part) to your employee as a subsidy. A minimum subsidy of 15% of the conversion amount is provided for this purpose. However, this can also be chosen to be higher. Create an additional incentive for the company pension and show your employees that you want to actively support them in building up a pension. This is employee retention without high costs. Contributions to a direct insurance policy are state-subsidised (§ 3 No. 63 EStG). They are exempt from contributions up to an amount of 4 % of the income threshold for statutory social security contributions. The sum is available one more time with tax exemption only. If you support your low-paid employees (up to 2,200 euros gross per month, also applies to part-time employees) by setting up an employer-financed occupational pension, you can receive 30% state subsidy for this commitment. We will be happy to provide you with details.

Company accident insurance

Accidents happen faster than you think. All the worse if it is an accident at work that puts one of your employees on disability. The benefits from a group accident insurance policy can solve the financial problems resulting from a disability. Solid disability cover is available through group accident insurance at a relatively low premium - even for yourself.

Company health insurance

For the installation of a company health insurance, you conclude a contract with an insurer. You select one or more tariffs of supplementary health insurance for your employees to choose from. You should especially think about the area of supplementary in-patient cover. Either a predefined quota of all employees or a minimum number of employees is required as a prerequisite for access. If the requirements are met in full, insurance cover for employees is usually granted without or at least with a simplified health check. Employees who enjoy better health care get better faster and stay on sick leave for a correspondingly shorter period of time. This is a real benefit for you as an employer.