Contents Insurance: What Businesses Should Insure and What It Costs
Burglary at night, water damage from a burst pipe, or a fire in an adjacent room: Business inventory can quickly be damaged or completely destroyed. Which insurance pays in such a case? Commercial contents insurance covers the costs for damages to your movable business assets that are not part of the building or a vehicle.
This guide explains what exactly is insured, what costs you can expect, and what you need to consider when signing up. Our assessments are based on thousands of consultations and real-world claims.
- Scope of coverage: The contents insurance protects all your movable business assets, such as furnishings, machinery, goods, and IT equipment.
- Covered perils: Covered are fire, burglary, water damage, as well as storm and hail.
- Important addition: Natural perils such as flood or earthquake are usually not included and must be added separately.
- Most common mistake: An insufficient sum insured leads to underinsurance – claims are then only covered proportionally.
What is Commercial Contents Insurance?
Commercial contents insurance protects a company's movable business assets against damage from fire, burglary, burst pipes, and storm and hail.
It functions like a household contents insurance for your business, but exclusively covers business assets. While building insurance only covers the building itself, contents insurance includes everything you would take with you if you moved out of your business premises.
Our consulting experience shows: Damage to business inventory is not uncommon. Statistically, approximately one in two businesses experiences at least one significant loss within seven years – typically caused by:
- Classic Perils: Fire, burglary/vandalism, burst pipes, storm, and hail.
- Extended Risks: Glass breakage, electronic failures, loss of refrigerated goods, or natural hazards (e.g., flooding).
Important: Often, the greatest risk is not the direct property damage, but the subsequent business interruption. In the Allianz Risk Barometer 2025, German companies name business interruption as the second most important business risk; natural catastrophes rank third. High-performance policies therefore combine property protection with business interruption insurance, which covers fixed costs and lost profits during the closure.
Contents insurance is offered under various names but always refers to the same product:
- Business Contents Insurance
- Business Contents Insurance
- Company Contents Insurance
The name depends on the insurer and policy, not on the scope of coverage.
Insured contents typically include:
- Goods, raw materials, and stock
- Business equipment and furniture
- Machinery and technical equipment
- IT hardware and electronics
- Third-party property such as customer goods or leased assets (depending on the agreement)
Business contents insurance isn't just for large companies. What matters isn't the size of your business, but how much it relies on its equipment, goods, or technology.
Even seemingly "manageable" damages can quickly reach magnitudes that cannot be covered by current liquidity. In the hospitality industry, smoke or scorching damage, including business interruption, can quickly cause costs exceeding 100,000 Euros.
The greatest risks don't arise where they are obvious, but where they are underestimated.
Do you know if your business is truly protected in an emergency?
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What damages are covered by contents insurance?
Contents insurance covers damages caused by fire, burglary, burst pipes, and storm and hail. These so-called basic perils form the core of almost all tariffs.
Fire typically includes fire, lightning, explosion, implosion, and, depending on the tariff, deflagration. Consequential damages from smoke, soot, or firefighting efforts may also be covered. However, damages from vehicle impact are not part of fire coverage but must be included as a separate risk or extension, depending on the tariff.
Even minor fires often lead to significant consequential costs. Besides damaged furnishings, there are additional expenses for cleaning, restoration, and downtime – often considerably more expensive than the actual fire damage.
Burglary and robbery protect you against theft by forced entry and against vandalism after a break-in. Important: Simple theft without signs of forced entry, for example, if goods disappear during the day, is not insured.
In the case of a broken-into safe containing 26,000 Euros in cash, the standard limits – often 10,000 Euros – would not have been enough. Only the adjusted sum insured resulted in full reimbursement.
Water damage covers damage from burst pipes, frost, and escaping water from supply and drainage pipes or connected systems such as sprinklers or air conditioning.
These damages are among the most common causes, affecting approximately 12 to 20 out of 1,000 businesses annually. Often, inconspicuous defects like leaky hoses lead to significant consequential damage.
Storm and hail are insured if the storm generally reaches wind force 8. Hail damage is covered regardless of wind force, provided it directly affects the insured property.
Natural hazards such as flood, earthquake, landslide, snow pressure, avalanches, or backflow are not included in many policies and must be covered separately. These events, in particular, often cause exceptionally high damage and are simultaneously underestimated by many businesses.
What is not covered by contents insurance?
Contents insurance only covers clearly defined, sudden damages. Everything outside these perils is generally excluded.
In practice, this is precisely where most misunderstandings arise.
Simple theft without signs of forced entry is not insured. If items are stolen from unlocked rooms or freely accessible areas, there is no insurance coverage.
Many losses occur during daytime operations – for instance, when goods go missing. Without verifiable evidence of a break-in, such incidents are not considered insured losses.
Wear and tear and maintenance deficiencies are also excluded. Damages due to aging, wear, or lack of maintenance are not considered an insured event. In practice, this often applies to machines, lines, or technical systems where defects arise gradually rather than suddenly.
Technical failures such as operating errors, short circuits, or overvoltage are often not covered or only partially covered by standard contents insurance. For more comprehensive protection, electronics insurance or a corresponding additional module is usually required.
Deliberately caused damages generally result in the loss of insurance coverage.
Cash, securities, and similar valuables are often only insured up to certain compensation limits and under defined security requirements. For higher cash amounts, special agreements or extensions are usually required.
Pre-existing damages are also excluded. Damages that occurred before the contract began are not covered.
A particularly common misconception in practice: Many entrepreneurs assume that "everything is somehow covered". In reality, claims often reveal that precisely the relevant risks are not covered or are only partially covered.
Coverage issues rarely stem from a complete lack of insurance, but rather from crucial components being absent or contract details not aligning with the actual risk.
How high should the sum insured for contents insurance be?
The sum insured must correspond to the current replacement value of your entire inventory so that you can fully replace everything in the event of a claim.
Most policies pay out on a replacement value basis. This means you receive the amount it costs today to replace an equivalent item. In contrast, insurance on a depreciated value basis leads to significantly lower payouts because wear and tear is taken into account.
This is precisely one of the most common mistakes in practice.
Many entrepreneurs base their estimates on the book value from the balance sheet or roughly estimate the value by feel. The idea behind it: “The items are already old.”
The problem only becomes apparent in the event of a claim – because the replacement value is compensated, not the old depreciated value.
Our consulting practice shows: Underinsurance rarely occurs intentionally, but almost always gradually.
New acquisitions are not reported, prices rise due to inflation, and existing contracts are not adjusted for years. In many cases, businesses are consequently 40 to 60 percent underinsured without knowing it.
The result: Damages are not fully compensated, but only proportionally.
If your sum insured is lower than the actual value of your inventory, the claim will be reduced proportionally.
The logic behind it:
Payout = (Sum insured ÷ Actual value) × Loss amount
Specifically: If you only insure 50 percent of your inventory, you will only be reimbursed for 50 percent of the loss.
Examples from VersicherungsEngel's practice:
- Hair salon: 60,000 Euro value, 30,000 Euro insured → 20,000 Euro loss → only 10,000 Euro payout
- Carpentry workshop: 120,000 Euro value, 60,000 Euro insured → total loss → only 60,000 Euro payout
- IT Office: 45,000 Euro value, 25,000 Euro insured → 15,000 Euro loss → only approx. 8,300 Euro payout
Conclusion: Underinsurance is often only discovered when a claim arises – and can quickly become an existential threat.
How to determine the correct sum
- Create a complete inventory list of all business assets
- Value each item at its current replacement cost, not its purchase price
- Also consider smaller items – they add up quickly
- Include a safety margin of 15 to 20 percent
For more complex businesses, such as those in manufacturing or trade, a professional valuation is advisable.
The correct sum insured is not a one-time decision but must be reviewed regularly. Growth, investments, or price increases often change the actual value of your business faster than it becomes apparent in the contract.
Most problems with payouts in the event of a claim are not due to a lack of insurance, but to incorrectly calculated sums insured.
If you're unsure whether your current coverage is sufficient, a quick check is worthwhile – this is precisely where most gaps occur.
Many businesses are underinsured without knowing it.
Let us check now if your sum insured is still sufficient.
Are you looking for suitable contents insurance?
How much does commercial contents insurance cost?
The cost of contents insurance depends on your business's individual risk and cannot be determined as a flat rate.
The most important factor is the industry. An office business pays significantly less than a restaurant with open flames or a production facility with a high fire load.
Additionally, several factors determine the premium amount:
- Sum insured: The higher the value of your inventory, the higher the premium.
- Deductible: A higher deductible reduces ongoing costs.
- Location: Burglary risk and flood exposure influence the price.
- Security measures: Alarm systems, safes, or security locks can reduce the premium.
- Additional components: Add-ons like electronics or business interruption insurance increase the premium.
For guidance:
- A small office with an insured sum of around 50,000 Euros often costs under 300 Euros per year.
- A retail store with an inventory value of approximately 150,000 Euros usually costs between 400 and 1,000 Euros annually, depending on the industry and location.
- Production businesses with high machinery value often fall significantly above this range and require individual calculation.
Our consulting experience shows: The biggest price difference rarely comes from the policy itself, but from incorrectly assessed risks. Two businesses that appear similar can have a premium difference of several thousand Euros depending on their location, equipment, and coverage.
An often underestimated factor is location. Even before renting, it's worth checking the risk assessment:
- Is the property located in a flood zone?
- What is the burglary risk in the region?
These factors can make a difference of several thousand euros in the long run.
The crucial point: Price alone is not a meaningful comparison factor.
A cheap policy won't help you if key risks aren't covered in the event of a claim, or if the sum insured was set too low.
Contents insurance is one of the fundamental protections for a business. Compared to the potential damage, the costs are often manageable – but it's crucial that the coverage matches your actual risk.
If you only look at the price, you'll overlook the very factors that determine whether you get paid out in a serious claim.
Which additional modules are useful for contents insurance?
Additional modules extend the coverage of contents insurance and are crucial in practice for comprehensive protection.
A business interruption insurance covers your ongoing costs and lost profits if your business comes to a standstill after a loss. In practice, the financial damage from the interruption is often higher than the actual property damage.
From VersicherungsEngel's Practice: Many businesses are insured against property damage, but not against loss of revenue. This exact situation often leads to liquidity problems in an emergency, even though insurance is in place.
The biggest gap often arises not from property damage, but from business interruption. Many policies simply set the sum insured at the level of the contents insurance – which is often incorrect in practice.
Crucially: What's insured is not the material value, but your annual gross profit (revenue minus variable costs). If this is set too low, damages will only be compensated proportionally.
Practical examples:
- Dental practice: 300,000 Euro Gross Profit, 150,000 Euro insured → 100,000 Euro damage, only 50,000 Euro payout
- Bakery: 180,000 Euro Gross Profit, 90,000 Euro insured → 20,000 Euro damage, only 10,000 Euro payout
- Event service provider: 240,000 Euro Gross Profit, 80,000 Euro insured → 40,000 Euro damage, only approx. 13,000 Euro payout
Besides the sum insured, the indemnity period – also known as the compensation period – is the most critical key variable. It defines how long the insurer will cover lost profits and fixed costs. An indemnity period of 12 months is often agreed upon; for businesses with longer procurement, reconstruction, or approval times, 18 or 24 months may also be advisable.
Key takeaway from practice: If you only insure a portion of your gross profit, you'll only receive a portion of the damages – and that's exactly what will be missing in an emergency for rent, salaries, and operating costs.
Can your business withstand several months of downtime?
Get a non-binding review of your business interruption insurance
Electronics insurance covers damage due to operating errors, short circuits, or power surges. These risks are not included in standard contents insurance. It is particularly relevant for: offices and IT service providers, practices with medical technology, and businesses with automated processes.
Our consulting practice shows: Especially with technical defects, many entrepreneurs assume that "it's already covered." In reality, these specific damages are often excluded.
Natural hazard coverage protects against floods, backwater, or earthquakes. These events are rare but often cause very high damage. Inclusion is particularly important: in flood-prone regions, for basements, storage areas in the basement, or for valuable inventory. Many businesses forgo it because the risk is considered low – until it actually occurs.
Glass insurance covers damage to shop windows, glass facades, and display cases. It is often beneficial for retail, gastronomy, or practices with customer traffic. Especially with large glass surfaces, even minor damage can quickly become expensive.
Off-premises coverage extends protection to items outside the business premises, such as on construction sites, at trade fairs, or in vehicles. This is particularly relevant for trades, field services, and event and trade fair companies.
Basic coverage is often insufficient to fully secure actual operations. Which components make sense always depends on how your business operates and where the biggest risks lie.
The biggest coverage gaps rarely arise from obvious risks, but from the details – precisely where standard solutions reach their limits.
Is your business adequately protected against damage?
For which businesses is contents insurance particularly important?
Contents insurance is essential for all businesses with significant material assets, regardless of size or industry.
It is particularly relevant for:
- Retail, due to high inventory levels and an increased risk of burglary.
- Gastronomy, as kitchen operations create a significantly higher fire risk. Additionally, there are industry-specific risks such as damage to refrigerated goods due to power outages, expensive catering electronics, storm damage to awnings, or theft of outdoor furniture. Government-mandated closures can also have economic consequences, but are generally not automatically covered by classic contents or business interruption insurance. A special additional module is required for this.
Tip: Discuss this risk specifically with a specialized broker like VersicherungsEngel, as not all insurers offer suitable solutions and the differences in detail are significant.
- Medical Practices and Healthcare Professionals, because medical equipment can quickly reach six-figure values. A common risk: damage due to operating errors or short circuits is often not covered without additional modules.
- Craft and Production Businesses, who need to insure machinery, tools, and supplies. Especially in production, gaps often arise if machines are not insured against machine breakdown – for example, due to operating errors, technical defects, or lack of maintenance.
- Service Providers and Offices, even if the risk is often underestimated. IT, technology, and furnishings have a real replacement value that can quickly reach tens of thousands of euros.
Smaller businesses, in particular, often underestimate the true value of their equipment and, consequently, their risk.
Important to know: Even as a tenant, you are personally responsible. The landlord's building insurance only covers the building, not your furnishings, goods, or equipment.
The situation is particularly critical for new businesses: In the first few years, reserves are often lacking. At the same time, our experience shows that property damage in about 70% of businesses in the first two years exceeds their available liquidity.
Even for companies less than five years old, this proportion is still around 25%. Without protection, such damages quickly lead to funding gaps, loans, or in the worst case, insolvency.
What damages actually occur in practice?
The most common damages are not major catastrophes, but everyday occurrences with noticeable financial consequences.
Many business owners first think of fire or total loss. In practice, however, smaller but frequent damages that regularly impact businesses are more prevalent.
Typical types of damage include:
- Electronics and IT damage:
The most common cause, with 20 to 35 incidents per 1,000 businesses annually. Triggers are usually overvoltage, short circuits, or operating errors. - Glass breakage:
Particularly common in retail, gastronomy, or the beauty sector – for example, due to accidents during operations or vandalism. - Water damage:
Occur in approximately 12 to 20 out of 1,000 businesses annually. Common causes include burst pipes or small defects like leaky hoses. - Burglary:
With 8 to 15 cases per 1,000 businesses annually, it's a regular risk, often associated with additional damage due to vandalism.
Most of these damages fall within the range of 500 and 10,000 Euros. While this may seem manageable at first glance, it can quickly become a burden without protection – especially if multiple damages occur in a short period.
From our consulting experience, it's clear: A large portion of damages does not arise from extraordinary events, but from normal day-to-day operations. This is precisely why they are often underestimated – until they actually occur.
Large damages occur significantly less frequently, but they are existential threats.
Two practical examples illustrate the scale:
- A supermarket fire caused approximately 2,000,000 Euros in damage for repairs alone.
- A restaurant suffered smoke and fire damage, resulting in 100,000 Euros in property damage.
- Additionally, 70,000 Euros in downtime costs were incurred because the business had to close for about 2.5 months.
The crucial point: The actual damage is often not the biggest problem.
Business interruption often causes higher costs than the property damage itself.
A defective device or damaged equipment can be replaced. However, if your business is shut down for several weeks or months, salaries, rent, and fixed costs continue – while revenue completely ceases.
The risk in contents insurance consists of two components:
- frequent, minor damages, which regularly tie up liquidity
- rare, major damages, which can be existential threats
Both must be secured to truly stabilize your operations.
The biggest misjudgment is not that risks are ignored – but that they are wrongly prioritized.
Common Mistakes When Taking Out Contents Insurance
The biggest risks don't come from a lack of insurance, but from a poorly configured policy. An often underestimated detail is the conditions that determine whether a claim is paid or rejected.
A policy that fails to pay out when it matters is ultimately more expensive than having no protection at all.
Common mistakes in practice include:
- Sum insured too low:
Many business owners rely on the book value from their balance sheet. This value decreases due to depreciation, while the replacement value increases. The consequence is underinsurance and a pro-rata reduction in the event of a claim. - Natural perils not included:
Risks such as heavy rain, backwater, or flooding are often underestimated. Without an additional module, you'll be stuck with the costs, even if your business is supposedly "not at risk." - Business interruption coverage missing:
Property damage is often not the biggest problem. The real financial pressure comes from loss of revenue. Without coverage, you have to bear ongoing costs like rent and salaries yourself. - Third-party property not considered:
Customer property, leased equipment, or rented machinery are not automatically insured. They must be explicitly stated in the contract, otherwise there will be no coverage in the event of a claim. - Security requirements not met:
Insurers define specific requirements for locks, alarm systems, or fire protection. This includes, for example, how often electrical systems must be inspected or which structural security measures are mandatory. In practice, it often comes down to details – for instance, if, during a burglary, cylinder locks protrude more than 4 millimeters from the lock plate. Some insurers do not pay out at all in such cases, even though the damage itself would be covered.
A particularly critical aspect concerns waiting periods in business interruption insurance. Many policies only pay out after several days of standstill. For businesses with low liquidity, this period can already be an existential threat.
Thorough consultation ensures that coverage is effective from day one and all relevant risks are accurately covered.
Most claim issues don't arise because there's no insurance – but because crucial details don't align with the actual risk. A policy that doesn't pay out when it matters is no protection.
The crucial differences are not in the price, but in the structure of the protection: appropriate sums, suitable components, and fulfilled contract conditions.
This is precisely where standardized solutions and comparison tools reach their limits.
How useful are comparison tools?
Comparison tools are useful for simple products, but quickly reach their limits when it comes to commercial contents insurance.
The reason is complexity: these tools primarily optimize for price, not for actual risk coverage. This is precisely where the biggest gaps arise in practice, as individual operational risks can only be standardized to a limited extent.
Common issues with online portals include:
- Incorrect Sums Insured:
Standardized queries often fail to account for the true value of machinery, goods, or specialized equipment. This quickly leads to underinsurance. - Inadequate Business Interruption Coverage:
Coverage is often generically linked to contents insurance. For businesses with high turnover and comparatively low material assets, such as restaurants or medical practices, this is professionally inadequate. - Unclear contract terms:
Important details in the fine print are often overlooked. A portal does not check whether your actual security measures meet the insurer's requirements.
Our consulting practice shows: Many businesses come to us with policies from comparison calculators that seem cheap at first glance – but contain crucial gaps in detail. This usually only becomes apparent in the event of a claim.
Comparison tools provide initial guidance but do not replace a thorough risk assessment. If you only compare prices, you'll overlook the crucial details that determine payout in the event of a claim.
In practice, this often leads to contracts that fail to deliver what you expect when it matters most. The difference only becomes apparent when benefits are reduced or the insurer refuses to pay out.
Here's the key difference: VersicherungsEngel doesn't rely on comparison tools, but on specialized brokers who know your industry and its typical risks inside out. This not only compares prices but, more importantly, prevents coverage gaps.
Don't risk coverage gaps.
Get a no-obligation check to see if your coverage truly fits your business.
What defines good content insurance advice?
Good advice ensures that your content insurance actually pays out in the event of a claim and has no gaps. It actively reduces the risk of claim rejections.
It goes far beyond a quick online policy and analyzes your business in detail.
The most important components are:
- Correct valuation:
Your inventory is valued at its current replacement cost, not based on outdated book values. This way, you avoid underinsurance. - Gross profit analysis:
For business interruption, your actual annual gross profit is calculated. Only then are ongoing costs and lost profits realistically covered. - Review of security requirements:
Locks, alarm systems, and fire protection are aligned with the insurer's requirements. This reduces the risk of claim rejections. - Selection of suitable supplementary components:
Your coverage is tailored to your business model, for example, through machinery insurance, electronics protection, or refrigerated goods insurance.
The crucial difference becomes apparent in the event of a claim. Good advice ensures that your coverage doesn't just work on paper, but also holds up in practice.
Contents insurance is not a one-size-fits-all product. It needs to be tailored to your business – its structure, scope, and specific details.
If these aspects aren't properly aligned, you'll have a false sense of security: you're insured, but not adequately protected when it truly matters.
VersicherungsEngel connects you with specialized brokers who focus on your industry and the typical risks of your business model.
The goal is not to quickly close a deal, but to create a safeguard that truly works in an emergency.
This is how claims reporting works at VersicherungsEngel
In the event of a claim, speed and thorough documentation determine how quickly and fully you will be compensated.
The most important steps are:
- Report the damage immediately:
Immediately inform your insurer or broker about the incident. Especially in cases of burglary, reporting deadlines of a maximum of 72 hours often apply. - Involve the police:
In cases of burglary, theft, robbery, or vandalism, reporting it to the police is mandatory. Without a case number and police report, claims are generally not processed. - Document the damage:
Take photos and videos of the damage site, secure inventory lists, and collect purchase receipts. Thorough documentation significantly speeds up the claims process. - Do not prematurely clear away damage:
Do not clean up the damage site before the insurer or an expert has inspected it. Exceptions apply only for direct damage mitigation, such as stopping water damage. - Involve a broker:
A broker guides you through the process and coordinates the settlement with the insurer. This helps to avoid errors and ensure the damage is assessed correctly.
The most common delays are not caused by the insurer, but by incomplete reports or missing documents. A clear initial report often saves weeks in the event of a claim.
A claim is always an exceptional situation. This is precisely when it becomes clear whether your coverage and background support are effective. Well-prepared claim reports not only lead to faster payouts but also significantly fewer reductions or queries.
VersicherungsEngel supports you in the event of a claim by facilitating communication with the insurer and broker, assisting with the compilation of necessary documents, and helping to avoid common mistakes in the claim report.
Conclusion: Why Contents Insurance is Not a "Nice-to-Have"
For businesses with significant material assets, commercial contents insurance is not an optional extra, but a central component of their protection.
What's crucial is not just whether insurance exists, but how it's structured. The differences between policies are significant, both in terms of benefits and the details of the contract conditions.
The greatest risks are caused by:
- insufficient insurance sums
- missing business interruption coverage
- overlooked additional components
A thorough analysis of your business, assets, and gross profit helps to avoid these gaps and ensures you remain operational in an emergency.
If you truly want to secure your business effectively, a simple comparison tool isn't enough. It's crucial that your individual risk is properly assessed.
VersicherungsEngel connects you with specialized brokers for your industry – ensuring your coverage doesn't just look good on paper, but actually works when it matters most.
Request your personal consultation now and let us assess your current coverage.
Lion Dahlenburg has been involved with insurance and personal protection for over 10 years. His focus is on understandable analyses and transparent recommendations for consumers.
- 10+ Years of Experience
- Specialization in Commercial Insurance