Professional Indemnity Insurance for Digital Professions also covers the costs for defending against unjustified claims by your customers as well as for professional claims settlement (so-called “passive legal expenses insurance”) including out-of-court and court costs (e.g. lawyer, expert, witness, court and travel expenses).
“Passive” in this context means that the service relates to the defence of third-party claims (e.g. from the principal) and not to the “active” enforcement of one's own claims.
Inadequate Protection Through Terms and Conditions
Even sophisticated terms and conditions or individual contractual provisions do not offer protection against a principal taking legal action against a (freelance) service provider. Passive legal expenses insurance is therefore of central importance in the event of a damage event.
Whether and to what extent the service provider is at fault in the event of a damage event can often only be clarified through a lengthy procedure or even a legal dispute.
Out-of-court and Court Costs
The out-of-court and court costs and the associated cost risk for a lengthy legal dispute are borne by the insurer as part of passive legal expenses insurance. An expert network of international lawyers and appraisers is available as part of this insurance.
Further Elements of Legal Protection
Legal Protection of Remuneration
Professional Indemnity for Digital Professions also covers the legal costs if you have to defend yourself against unjustified offsetting of damage with your outstanding remuneration (service or work wages). The compensation limit is 300.000 euros per insured event.
Legal Protection in Criminal Cases
If criminal proceedings arise in connection with a damage event, the insurer will also cover the necessary legal and court attendance expenses. The compensation limit is 300.000 euros per insured event.
Legal Protection in Insolvency Challenges
The insurance also covers cases in which your fee or wage payment is contested by an insolvency administrator. After prior agreement, the insurer reimburses the costs incurred for a legal review of the legality and costs of legal action against the challenge. The compensation limit is 300.000 euros per insured event.