Legal protection insurance covers the financial consequences of legal disputes, i.e., the actual litigation risk.
Litigation as a luxury
Liability insurance is absolutely essential (s. Chapter 07.11 Liability insurance), while legal expenses insurance is not strictly necessary. However, since simply being in the right is not enough for many people, and litigation has become a luxury in many cases (s. also Chapter 10.10 Legal protection in intellectual property law), it is certainly advisable to consider taking out legal protection insurance.
Check your risk coverage!
It is important to consider that, on the one hand, the defence of one’s own rights, for example in liability cases, particularly in traffic accidents, is already covered by the relevant insurance. On the other hand, legal protection insurance policies often exclude areas such as IT and intellectual property law due to the correspondingly high litigation risks (s. also Chapter 10.10 Legal protection in intellectual property law). Therefore, before taking out legal protection insurance, it is essential to check whether certain litigation risks are already covered by other insurance policies and, on the other hand, whether one’s own litigation risks (especially in IT and intellectual property law) are effectively covered by the legal protection insurance. As with liability insurance (s. above), it should also be noted that private legal protection insurance does not cover legal disputes within a business (but, for example, a legal dispute between an employee and their employer). It is also important that the legal protection insurance allows the policyholder to choose their own lawyer. While lawyers offered by the legal expenses insurance are generally not bad, litigation with one’s own trusted lawyer is certainly more comfortable.
Costs of legal protection insurance
The cost of legal protection insurance is often low for private individuals, but more expensive for businesses. The cost of legal protection insurance can also be offset by the legal advice usually offered by the legal expenses insurer’s own lawyers, which can also be used outside of court proceedings. For this reason alone, legal protection insurance is particularly worthwhile for private individuals.