Legal protection: add-on or stand-alone product?
Business owners often think that if they take out legal protection insurance under their car or fire policy, they can also claim on it for other legal disputes. But this isn't normally the case. So, what legal protection insurance does cover you against all financial consequences of legal disputes?
As a business owner, you’ll often already have some legal protection insurance in place as an add-on. You may well be covered for legal protection under your liability, car and fire policies, for example.
Account Manager Jonas Mannaerts: “Since it is an add-on, this sort of legal protection cover tends to be cheaper but limited. That’s only logical because it will only apply to legal disputes to do with the policy taken out.”
In this blog, we set out what legal protection cover includes, what legal protection insurance does as a stand-alone product and what the main difference is between legal protection cover as an add-on and stand alone.
What is legal protection?
Your legal protection insurance covers your legal interests when an occurrence has led to a situation in which you have suffered or caused loss.
If your legal protection insurer needs to assist you, they will defend your rights whether you are the claimant or the defendant. They will always try to reach an amicable settlement first because this is the cheapest and most efficient solution.
If this is not sufficient and further legal steps are taken, the insurer will bear these costs, excluding any penalties imposed.
Legal protection as a stand-alone product
Taking out legal protection insurance as a stand-alone product has two big advantages.
The first is that all legal protection insurers offer packages tailored to every business. This means that, as a business owner, you can decide – in consultation with your broker – which legal risks you do or do not want to protect and which limits you want for certain risks.
The second advantage is that, unlike add-on legal protection insurance, with the stand-alone product, you can take out several extra covers. These include the following extensions for your business:
Contractual disputes with suppliers and customers;
Disputes under administrative law;
Disputes under tax law with the possibility of an extension to cover tax audits;
Disputes under employment and social law.
A separate legal protection policy therefore protects you and your company against the ever-rising costs of settling a legal dispute.
Differences between an add-on and a stand-alone product
There are differences between legal protection insurance as an add-on and as a stand-alone product in terms of cover and price. For instance, the cover provided by add-on legal protection insurance is often limited whereas with a separate legal protection policy, you can often determine the limits for yourself.
“But the biggest difference between an integrated and a stand-alone policy is the objectivity that is crucial in the event of a loss”, says Jonas Mannaerts.
“Suppose you suffer a loss that’s apparently not covered – with an integrated policy, you won’t be able to have your own assessment carried out, which could prove otherwise. However, you can do this when a stand-alone legal protection insurer protects your interests.”