Business contents insurance: What is covered? And what is not?
Commercial contents insurance protects a company's movable business assets against damage caused by fire, burglary, burst pipes, as well as storm and hail. This includes, among other things, furnishings, machinery, inventory, and IT equipment. Knowing where this coverage ends is just as important.
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- Coverage includes furnishings, machinery, inventory, IT equipment, and third-party property in the event of fire, burglary, burst pipes, as well as storm and hail damage.
- Simple theft without signs of forced entry, wear and tear, and intentional damage are not covered.
- Natural hazards such as heavy rain, flooding, sewer backup, or landslides are not included in many basic plans and must be added explicitly.
- If you do not include third-party property, such as customer goods or leased items, in your policy, you will not be covered in the event of a claim.
What is covered by commercial contents insurance?
Commercial contents insurance covers property damage to movable business assets caused by the perils insured under the contract. Standard coverage includes fire, burglary, tap water, and storm and hail. Natural hazards can be added as an optional extension:
- Fire: Fire, lightning strikes, explosions, deflagrations, and implosions. Typically included: consequential damage caused by smoke and soot, as well as vehicle impact. Surge damage resulting from a lightning strike is also covered in many policies. Depending on the plan, scorch or singe damage may also be included.
- Burglary and robbery: Burglary with traceable signs of entry, robbery, vandalism in connection with a burglary.
- Burst pipes: Pipe bursts, frost and thaw damage, water escaping from supply and discharge pipes or connected systems.
- Storm and hail: Storms from wind force 8, hail without a minimum wind speed.
- Natural hazards (optional): Flooding, heavy rain, backflow, landslides, snow pressure, earthquakes. Not included in many basic policies and can be added depending on the plan.
Depending on the insurer, classic risks can also be supplemented with modules such as "Extended Coverage" or all-risk coverage. Depending on the policy, this can include coverage for certain types of vandalism or other unnamed risks. However, the scope and requirements differ significantly between insurers.
Glass breakage is also not part of standard coverage and is usually protected via a separate glass insurance policy.
Insured contents generally include:
- Business equipment and furniture
- Inventory and stock
- Machinery and technical equipment
- IT hardware and electronics
- Third-party property such as customer goods or leased items, provided that insurance coverage has been explicitly agreed upon. Depending on the policy, compensation limits or sub-limits may apply here.
Commercial contents insurance protects a company's movable business assets against damage caused by fire, burglary, burst pipes, as well as storm and hail. This includes, among other things, furnishings, machinery, inventory, and IT equipment. Knowing where that protection ends is just as important.
From over 26,000 consultations on business contents insurance, we know that many businesses significantly underestimate their actual risks. We most frequently see damage from burst pipes, burglary, and fire. It becomes particularly expensive when the business has to shut down for weeks or months following the actual damage: fixed costs continue to accrue while revenue disappears.
Do you know if your business is truly protected in an emergency?
What is not covered by commercial contents insurance?
These exclusions apply to most standard policies. If you are unaware of them, you may face a coverage gap in the event of a claim:
- Simple theft without signs of forced entry: Not considered burglary under the terms of the insurance policy. Some insurers offer supplementary modules for specific risks such as outdoor seating or goods stored in open areas.
- Wear and tear and aging: Gradual damage caused by wear and tear or lack of maintenance is not covered.
- Technical damage: Operating errors, material breakage, short circuits, or damage caused by improper handling are often not covered by standard business contents insurance. Depending on the business, electronic, machinery, or all-risk coverage may be considered for more extensive risks.
- Cash and securities: Insured only up to tariff-defined compensation limits. A separate cash-in-safe module is required for higher amounts.
- Intentionally caused damage: Generally result in the complete loss of insurance coverage.
- Vehicles on the business premises: Covered under motor vehicle insurance, not contents insurance.
- Pre-existing damage: Damage that occurred before the contract was concluded is not covered.
- Natural hazards: Natural hazards such as heavy rain, flooding, sewer backup, or landslides are not covered unless specifically included.
The big misunderstanding regarding insurance value: Many businesses base their insurance sum on the current market value of their equipment. This is the wrong approach. Commercial contents insurance pays out at replacement value—that is, the amount required today to purchase equivalent new items.
Anyone who only considers the current market value when setting the insurance sum risks being underinsured, which can lead to proportional reductions in the event of a claim.
A high-quality policy often includes a waiver of underinsurance. Under certain conditions, this can prevent the insurer from proportionally reducing compensation due to an insurance sum that was set too low. This requires that the insurance value was determined completely and correctly when the contract was concluded.
A particularly common misconception: Many entrepreneurs assume that technical damage caused by short circuits or operating errors is covered. In reality, these specific types of damage are often excluded from standard contents insurance. If you operate IT equipment or medical devices, you should specifically look into including electronics insurance.
Many businesses have gaps in their contracts without knowing it.
What should businesses pay special attention to regarding contents insurance?
In practice, three points frequently lead to problems when a claim occurs:
Declare third-party property
Anyone who regularly works with customer goods, leased equipment, or borrowed machinery must explicitly state this in the contract. Property that is not declared is not insured, even if it is on the premises at the time of a loss. You should also check whether the policy provides sufficient compensation limits for third-party property.
Meet security requirements
Many policies tie burglary protection to specific requirements. Depending on the insurer, these may include standards for lock quality, alarm systems, roller grilles, security for basement windows, back doors, or other mechanical security devices. If these obligations are not consistently met, the insurer may reduce its payout in the event of a claim, depending on the severity of the breach of duty.
Check natural hazard coverage
If you are located in a flood or heavy rain zone, or use basement areas, you should actively consider including natural hazard coverage. It is not included in many basic tariffs, even though these specific damages can be particularly high.
Commercial contents insurance: The next step
Anyone who knows exactly what their contents insurance covers—and what it doesn't—won't be surprised in the event of a claim. The most common gaps don't arise from a lack of insurance, but from exclusions that are in the contract but were never checked.
You can find details on benefits, costs, and useful add-on modules in our guide to commercial contents insurance.
With VersicherungsEngel, you can have your existing insurance coverage reviewed. Specialized brokers check existing policies for potential coverage gaps, the adequacy of insured sums, and relevant add-on modules.
Request a personal consultation and have your coverage reviewed.
Good questions deserve good answers.
The questions we hear most — answered in plain English.
Frequently asked questions about business contents insurance
In most commercial contents insurance policies, goods, raw materials, and supplies are covered. It is crucial that they are fully accounted for when determining the insured sum. If you set your inventory value too low, you risk underinsurance and will only receive partial reimbursement in the event of a claim.
Vandalism is covered if it is related to a burglary. Vandalism without a break-in, such as property damage from the outside, is generally not covered in standard policies. For vandalism damage without a break-in, some insurers offer extensions or so-called "all-risk" modules. However, the options vary significantly between policies.
Not necessarily. Customer goods, leased items, or rented machinery are only covered if the contract explicitly provides for it. Whether and to what extent coverage exists depends on the specific policy. Many insurers also limit compensation via sub-limits. If you regularly work with property belonging to others, you should actively address this when taking out the policy.
In the event of underinsurance, the insurer reduces the payout proportionally. The formula: Payout = (insured sum divided by actual value) multiplied by the amount of damage.
Example: If the actual inventory value is 100,000 euros but the insured sum is only 60,000 euros, the insurer will only pay out 18,000 euros in the event of a 30,000 euro loss. If you only insure 60 percent of your inventory, you will only be reimbursed for 60 percent of any partial loss.
If the policy includes a waiver of underinsurance, different rules may apply under certain conditions. Whether this waiver applies and up to what damage amount depends on the specific insurer and policy.
Questions about D&O insurance
D&O insurance starts at roughly €500–€1,500 per year for smaller companies, and can run into five figures for larger organisations. However, the cost of your D&O insurance depends largely on the following factors:
- Company size & turnover:The bigger your company, the higher the risk.
- sector:In highly regulated or high-risk industries (such as finance or construction), you pay more on average.
- Coverage amount:The higher the coverage amount (e.g., €1 million vs. €10 million), the more expensive the policy.
- Number of insured persons:If your D&O insurance covers not only you but also other board members or managing directors, this will result in higher costs.
- Individual risk assessment:Does your company have a history of lawsuits or claims?
The bottom line: the cost of D&O is always lower than the cost of personal liability.
Because a good D&O protects your private wealth and therefore also your future in an emergency, it is always worthwhile. However, our insurance angels will also find the best price for you on top.
Yes. Although GmbH stands for "Gesellschaft mit beschränkter Haftung" (limited liability company), that protection only applies to claims directed at the company itself — not to you personally as a director.
Your GmbH is sufficient as protection if...
- Your company causes damage, such as a product defect or a breach of contract.
- Customers or business partners assert claims against the GmbH, not against you personally.
- As managing director, you have acted to the best of your knowledge and belief without any breach of duty.
The GmbH does NOT protect you if...
- You are held personally liable for incorrect decisions, e.g., due to delayed insolvency filing, tax errors, or gross negligence.
- Shareholders, authorities, or investors sue you.
- you are accused of one or more of the breaches of duty mentioned above.
The insurance company may decide not to pay in the following cases:
1. If the damage resulted from a business decision made without any breach of duty.
Example: a CFO invests millions in a project without a risk analysis — despite warnings from the finance team. The insurer pays. But if a CFO makes a carefully considered strategic decision that fails due to unpredictable market conditions, the insurer does not pay.
2. When the board member acted intentionally — for example, in cases of fraud or deliberate violations of the law.
3. If the agreed coverage amount is not sufficient..
If a CEO is held liable for €10 million in damages but only has €5 million in coverage, the difference comes out of their personal assets.
In short: D&O protects you against negligent mistakes — provided your coverage is adequate. It does not cover intentional misconduct or policies that are too low. That's exactly why professional, personalised advice matters — which is what your Insurance Angel is there for.
Yes — D&O insurance typically remains valid for several years after you leave your position, provided the claim relates to a decision made during your time in office.
Yes — even in a voluntary capacity, you can face personal liability for wrong decisions. For example, if you sign contracts that cause financial harm to the organisation.
Beyond protecting you personally, a good D&O policy can also cover part or all of the actual damage caused by your mistake.
Example: Stefan, managing director of an engineering firm, invests €5 million in a new production line — without adequate due diligence. The equipment doesn't work and the company loses €3 million. Shareholders sue Stefan personally. His D&O policy covers his personal liability as well as a portion of the resulting business losses.
When recommending a policy, your Insurance Angel makes sure it covers not just you, but potential damage to the company as well.
Yes and no. A good D&O policy addresses reputational damage — but only indirectly.
D&O itself does not compensate for lost revenue or a damaged reputation. However, additional coverage options exist that cover crisis management costs, such as PR consultants, mediators, or reputation agencies — all of which help limit the damage.
Lion Dahlenburg is the Managing Director of VersicherungsEngel and has been working in the insurance industry for over eight years. His areas of expertise include commercial insurance, risk management, sales strategies, and the digitalization of the sector. He has focused on these topics throughout his career, starting with four years at Allianz, followed by helping to build a Berlin-based InsurTech company for digital commercial insurance, where he established and led sales and customer service from the ground up.
During this time, he has personally acquired and supported over 1,000 corporate clients—a wealth of experience that informs his work today. With VersicherungsEngel, he and his team help around 2,000 companies every month find the right contact for their insurance and coverage needs. As an industry expert, he has been quoted as an interviewee by publications including the trade journal Versicherungswirtschaft heute.
Lion’s professional expertise is built on a degree in Business Administration with a focus on insurance, a Master’s degree in Business Consulting & Digital Management, and several IHK certifications in insurance, financial investments, and real estate loans.
Qualifications at a glance:
- B.A. in Business Administration (specializing in insurance) and a Master's degree in Business Consulting & Digital Management
- IHK-certified insurance specialist, financial investment specialist, and real estate loan broker
- Over 650 positive reviews on Trustpilot, Google, and eKomi, as well as more than 3,500 LinkedIn followers