exali Glossary
Your encyclopedia of technical terms used in the insurance industry
The insurance industry is full of technical terms—from insurance policies and obligations to recourse claims. To help you keep track of everything, the exali glossary explains the main insurance terms in a simple, understandable, and practical way.
In the exali glossary, you will find not only definitions, but also practical examples, legal information, and references to the appropriate insurance coverage. This way, you always know where the risks lie—and how to protect yourself against them.
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Service Contract
A service contract is a civil law contract in which one party (the service provider) undertakes to perform an activity or service—but not to achieve a specific result. In return, the other party (the service recipient) undertakes to pay remuneration (Section 611 of the German Civil Code (BGB)).
This means that the service provider owes the performance of the activity, not a specific result. This contrasts with a contract for work, in which a specific result (e.g., a finished product) is owed.
Examples of service contracts
- A freelancer is commissioned to create monthly social media posts, regardless of their reach.
- An external data protection officer provides advice and documentation but does not guarantee full GDPR compliance.
- A coach conducts an online seminar – without any guarantee of success for the participants.
- Service contracts are particularly common in the service sector, in consulting, and in the liberal professions.
Liability in service contracts
Since service contracts do not guarantee success, liability is generally limited to breaches of duty such as:
- Poor availability or failure to perform the agreed activities
- Incorrect advice or failure to provide information
- Violations of contractually guaranteed standards
If financial loss occurs, for example because an incorrect action has negative consequences for the customer, the service provider may be liable for damages.
Coverage through exali
exali's professional liability insurance offers tailor-made protection for service providers, consultants, coaches, agencies, and freelancers who work on a service contract basis. It covers, among other things:
- Financial losses due to consulting or communication errors
- Legal disputes with customers over the scope or quality of services
- Defense against unjustified claims through passive legal protection
Term: Service Contract
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