Rental cars usually come with their own insurance options, including liability coverage. This liability insurance or Kfz-Haftpflichtversicherung, is specifically for cars and is mandatory in Germany, it protects you as the driver from accidental damage that you might do to someone else or their vehicle whilst driving.
Personal liability insurance or privathaftpflichtversicherung, on the other hand, protects you in your day-to-day life whether that's in your rented apartment, skateboarding in the park or just hanging out at your friend's house. It doesn't cover incidents or damages that you might do to the car or anyone else whilst you're driving.
When you rent a car most companies will offer a basic level of car liability insurance. To protect yourself from accidentally damaging the car you should check with the rental company what additional insurance packages they offer to make sure that you've got enough coverage for any mishaps.