I believe Germany is generally heavy on liability and light on ways to avoid it. If you damage someone's property, there may be a procedure to confirm that you damaged their property, and then you must pay the value of the damage - as well as the court fee because you didn't just pay it upon asking. No ifs or buts. You cannot avoid paying it in any way, including the clever use of paperwork to avoid paying it. That's why there's a high bar to form a GmbH. As you correctly pointed out, good insurance can also limit your effective liability. I think such business liability insurance products are very common in Germany.

After reading that, for all the talk the USA has about "personal responsibility", it doesn't seem that serious about it, does it?

I haven't been sued either, and I live in Germany. I did pay someone $100 to replace something I accidentally broke, and walked away with the broken thing. No court was involved there and I didn't bother to claim insurance.

Limited liability is something you should always want, and if it merely costs a $30 filing fee and some forms, you should get it, but it's obviously jurisdiction-specific and in Germany, with the much higher requirements, it's obvious that they really only want medium to large businesses to have it (though this isn't a direct rule, I think).

From this thread I just learned about the Unternehmergesellschaft (haftungsbeschränkt) which is apparently a GmbH that can be formed for less than $25,000, but instead, you have to set aside 25% of your profit until you have $25,000, at which point you can convert to a normal GmbH.

That’s how insurance works. You don’t need it often and maybe not even your entire life, but if it happens and you aren’t covered it will ruin your life.

If this description is not accurate for the situation then you probably don’t need insurance.