Is your legal expenses insurer refusing to handle your business dispute? Check who is insured, which business activities are listed on the policy and which types of dispute fall under the module. A private legal expenses insurance policy does not automatically cover disputes arising from your business. Nor does a business policy offer the same cover for every business risk.
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Written by Onur Arslan, attorney at Arslan Advocaten. Onur Arslan practised for many years as a corporate lawyer and insolvency trustee (curator) and has extensive experience in financial law disputes. Do you have questions about your own situation? Get in touch.
Insured business and activities
A sole proprietorship, a private limited company (bv), a director and a shareholder are not the same insured party for every claim. A dispute about your own salary as an employee may be assessed differently from a dispute about a management agreement or shares. Ask on which capacity the refusal is based.
Compare your actual activities with the description on the policy and the information provided in the application. An expansion of activities, an acquisition or a new branch may be relevant. A different trade name is not decisive in itself, but it can raise questions about which business entered into the contract.
Client, supplier or debtor
With an unpaid invoice, debt collection assistance and a substantive contractual dispute may fall under different conditions. A debtor who alleges a defect or brings a counterclaim makes the case different from a simple undisputed collection. Ask which part the insurer will and will not handle.
A minimum financial interest, a waiting period, a known circumstance or an exclusion for certain contracts may also be invoked. Draw up a timeline of the assignment, its performance, the first complaint, the invoice and the refusal. This makes it possible to assess whether the insurer is using the correct event as the start of the dispute.
Disputes procedure under a business policy
If the dispute is covered but the case handler does not consider litigation feasible, the disputes procedure (geschillenregeling) may be relevant. Ask for the final substantive position and the applicable procedure. A refusal of cover because of your business activity is a different question from a disagreement about the prospects of success against your client.
The European framework contains rules on free choice and on disagreements in legal expenses insurance; see Directive 2009/138/EC, Articles 201 and 203. The specific policy and your position are still needed to determine the route.
Your own lawyer and costs
In covered proceedings, free choice of lawyer may come into play. Have it agreed in advance which proceedings, work and experts fall within the instruction. Ask whether VAT is deductible for your business and how that is reflected in the reimbursement. A cost limit may cover several related disputes.
An existing relationship with a lawyer does not automatically make the costs insured. Send a cost estimate and ask for a written decision. In urgent cases, it must at the same time be assessed which protective step is needed to safeguard your rights.
Complaint and further steps
Ask the insurer to reconsider, with reference to the policy and the correct factual timeline. Kifid, the Dutch Financial Services Complaints Tribunal, is not accessible for every business dispute; check whether it has jurisdiction for your product and position. Court proceedings may be necessary if the external complaints route is not available or does not offer an appropriate solution.
Frequently asked questions
Does my private policy cover a dispute as a self-employed professional (zzp’er)?
Not automatically. The capacity in which you are insured and the modules must be checked.
Is an unpaid invoice always covered?
No. Debt collection, a contractual defence and excluded activities may be treated differently.
Can a private limited company (bv) go to Kifid?
That depends on the applicable jurisdiction rules and the financial product. Do not assume that every business has general access.
Can Arslan take over the main case?
We can assess both the coverage dispute and the options for taking over the case. The instruction and funding are agreed in advance.
Read also about refusal of the disputes procedure, second opinions and complaints about legal expenses insurance.
Have the refusal of your business legal expenses insurance assessed.
This page provides general information and is not legal advice about your own situation. No rights can be derived from its content.
