Corona: Company closure insurance (BSV) prevents short-time work compensation

– Why the waiver of full BSV benefits at the expense of the Employment Agency is void –

Short-time work compensation (KUG) is a relief for employers – a business aid to keep employees available for the rapid ramp-up of operations after the crisis. An application to the Federal Employment Agency (Bundesagentur für Arbeit, BA) is effective from the first day of the month.

Employers who are entitled to a legal claim under an insurance contract from a business closure insurance (BSV) do not need a KUG and therefore do not receive it.


Punishability through short-time work compensation: Fraud, subsidy fraud,

If the statutory KUG requirements (cf. § 95 SGB III) are not met or not continuously met from the time of application, the BA will file a criminal complaint at a later date.

Investigations into the allegations of fraud (§ 263 StGB) and subsidy fraud (§ 264 VIII No.1 StGB) easily lead to subsequent punishment, because mere carelessness in the case of incomplete or incorrect information is sufficient.

The employer has duties of investigation, information, examination and supervision.


Hurdles to the payment of the own business closure insurance (BSV)

Some insurers claim that the closure of the plant due to Corona is not even covered by the policy. Other insurers regulate completely – or an alleged “goodwill payment” of, for example, 10-15% is offered if one waives a disputed full benefit.


Short-time work compensation excluded by plant closure insurance?

KUG is a subsidiary, i.e. subordinated social benefit of the state. The saying “Help yourself and God will help you” applies. If you have a BSV, you do not need a KUG for the insured period – the BA would offset any benefit claims from the insurance contract – even if you do not want to claim it at the expense of the Employment Agency.


The BA believes that it would only be different if the insurer were to provide a purely ‘voluntary’ service rather than a contractual one. Unfortunately, this cannot be taken from the contents of the agreement on the 10-15% “goodwill payment” – but must be read from the insurance conditions.

In order to avoid criminal liability, the employer must establish beyond doubt that a “corona plant closure” is not at all insured , i.e. he has no claimsarising from it. It is not enough that the insurer denies them, if they actually exist.

For economic reasons it would be a serious mistake to choose the “goodwill service” instead of the full service, because then even more would be achieved with KUG.


Short-time work compensation excluded through “goodwill” payments under the company closure insurance?

Anyone who is satisfied with 10-15% benefit, but is contractually entitled to 100%, does not receive 10-15% “voluntarily”, but waives (more or less voluntarily) most of the full benefit.

This means that in the worst case, which is to be assumed, BA will credit the full 100% BSV benefit entitlement – even if in the end only 10-15% is paid “voluntarily” by the insurer. The dictum in education is: “The state must not give anything away” – this is also called “subsidiarity principle”.


The renunciation of the full benefit in favour of a “voluntary goodwill benefit” at the expense of the state is contrary to good morals – this then leads directly to its nullity. The first consequence is that the state then credits the full entitlement to benefits as if it had been received.

However, even the insurer will not be able to invoke the waiver agreement and will therefore still have to pay 100%. However, the insurer can then invoke breaches of obligations, for example, by relying on goodwill payments to meet deadlines that have not been met.


Business closure insurance – in case of doubt first check, then sue for insurance management

In the absence of a legal basis, any divergent opinions expressed by BA employees will later prove to be grounds for investigations by the public prosecutor against employers, and possibly also against the official acting on grounds of embezzlement in the service.

Employers are well advised to obtain such opinions in writing – at best as a public law contract. It would not be a good idea to have a tax consultant give you a clean bill of health, because it would usually be unsuitable as an exhibitor – for example because the up to more than a dozen judgments on the necessary content of exempting certificates and expert opinions are unknown. Admittedly, this only helps to avoid a punishment – you cannot escape the reclaim of the KUG with it.


by Dr. Johannes Fiala and Dipl.-Math. Peter A. Schramm



Deutsche Handwerkerzeitung on 27.04.2020 under the headline Plant closure insurance prevents short-time work compensation


and on 27.04.2020 under the heading: Corona: Company closure insurance (BSV) prevents short-time work compensation


and on 29.04.2020 under the headline: No short-time work compensation if a company closure insurance exists


and on 29.04.2020 under the heading: Corona: Company closure insurance prevents short-time work compensation



Eyecom publishes on on 28.04.2020 under the headline: Corona: Company closure agreement (BSV) prevents short-time work compensation


and (published on 07.05.2020 under the heading: Company closure insurance or short-time work compensation?: Only one is possible)


and (published on 03.05.2020 under the heading: Corona: Company closure agreement (BSV) prevents short-time work compensation)


and (published on 08.05.2020, in “Das blaue Blatt”, issue no. 9, page 28/29 under the heading: Why the renouncement of full BSV management at the expense of the employment agency is void).


Deutsche Molkerei Zeitung (published on 07.05.2020, 09/2020, page 41, under the heading: Plant closure insurance (BSV) prevents short-time working compensation)


Computers in Crafts, (published in issue May 2020, page 5, under the heading: Company closure insurance (BSV) prevents short-time work compensation)

and (published in May 2020)


and (published on 29.04.2020)


and (published on 30.04.2020)



Beck Verlag (published in BC 06/2020)


and (published in Infinity magazine, issue 05/2020, page 26 and 27)

and (published in Der BauUnternehmer issue 147, July 2020, page 6 under the heading: Insurance against plant closure prevents short-time work compensation for employers in Corona times)











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Dr. Johannes Fiala Dr. Johannes Fiala

Dr. Johannes Fiala has been working for more than 25 years as a lawyer and attorney with his own law firm in Munich. He is intensively involved in real estate, financial law, tax and insurance law. The numerous stages of his professional career enable him to provide his clients with comprehensive advice and to act as a lawyer in the event of disputes.
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