Business legal expenses insurance

What is it?

Business legal expenses insurance, commonly known in Germany as “Rechtsschutzversicherung für Unternehmen,” is designed to offer financial support and expert legal guidance in the event of legal disputes. In an increasingly litigious society, even the most meticulous businesses can find themselves facing legal issues.

Whether it’s a dispute with a supplier or an employment issue, legal expenses can add up quickly. Having a comprehensive legal expenses insurance policy is an important business decision.

What are the benefits?

The advantages of this insurance type go beyond mere financial coverage for legal fees. Many policies offer 24/7 legal advice hotlines, cover costs for expert witnesses, and even represent you in court if needed. Coverage is often very flexible, allowing you to select specific legal areas that pertain most to your business risks.

Before selecting a policy, it’s crucial to understand the coverage limitations and any exclusions that may apply. Disputes arising from pre-existing conditions or issues that started before the policy was in effect are always excluded. On top, most modules have a three months waiting period, which means that any issues arising within the first three months are not covered. 

The most common coverage modules of this insurance are:

Company Law Protection: 

Covers legal disputes directly related to your company, including tax law, data protection or administrative law

What’s not covered: Contractual law is not covered and can only be added with high extra costs. 

Employment Issues:

Covers legal interests arising from disputes with employees, such as wrongful termination or discrimination claims.

Who is it for?

Any business should consider investing in business legal expenses insurance. From freelancers and startups to large corporations, the unpredictable nature of legal disputes makes this coverage an essential part of risk management.

Rates are typically determined by the business’s size, industry, and specific risk factors. Businesses in highly regulated industries may face higher premiums but should consider it a necessary cost of doing business.

Did you know?

~ 68%
An estimate of businesses that have a legal expenses insurance in Germany. [1]