Legal Insurance in Switzerland Explained

Personal legal insurance provides some protection against the financial impact of lawsuits and empowers victims to take legal action without fear of financial loss.

But legal insurance coverage is by no means comprehensive, and the coverage, terms and conditions you get vary between insurance policies. Before you sign up for legal insurance, it is important that you understand what you are getting and whether it covers your legal needs.

1. What costs are covered by personal legal insurance?

Typically, personal legal protection insurance covers:

• Lawyer’s fees
• Court fees
• Reimbursement of counterparty expenses (when you lose)
• Mediation costs
• Reports from experts
• The costs of issuing orders of summary punishment.

You can filter and sort Swiss legal insurance policies based on the coverage they provide using the interactive legal insurance comparison.

Note that some insurance policies have deductibles and some only cover legal bills when they exceed a minimum amount (300 Swiss francs or even 2000 Swiss francs, for example). The total coverage for legal expenses is typically limited to a maximum sum insured.

Some policies only cover legal expenses incurred in Switzerland, while others cover legal expenses internationally.

You are generally required to get a guarantee of coverage from the insurance company before enlisting the services of a lawyer or a court of law.

2. What situations are covered by personal legal protection insurance?

Situations which are generally covered by legal insurance policies include:

• Employment disputes. Important: In Switzerland, no court fees are charged for employment disputes when the disputed amount is less than or equal to 30,000 Swiss francs.
• Debt disputes
• Purchase disputes. Important: Some legal insurance policies only cover legal expenses which exceed a certain threshold – typically several hundred francs – making them unsuitable for low-value purchase disputes. Purchases from merchants based outside of Switzerland may not be covered by all insurance policies.
• Travel booking disputes
• Service delivery disputes. This coverage also extends to simple disputes with insurance providers, with the general exception of your legal insurance provider.
• Property rental disputes
• Criminal law

Legal insurance policies may also provide coverage for:

• The costs of legal cases involving personal property rights (use of your picture without your consent, for example)
• Internet rights
• Neighbor law
• Patient rights (lawsuits against healthcare establishments).

A handful of policies provide some coverage for:

• Marital law
• Inheritance law
• Real estate law
• Public construction law

Some policies cover the costs of general legal consultation even when no dispute is involved.
Coverage may be capped on a benefit-specific basis.

For example, policies which cover general legal consultation typically cap the sum insured at 500 francs per year. Annual benefits for neighbor law, family law and inheritance law are typically limited to a low sum insured (several hundred to several thousand francs) which may only cover part of your actual expenses.

3. What legal expenses are not covered by personal legal insurance?

• Traffic-related legal action. These expenses can be covered by motorist legal insurance. The moneyland.ch legal insurance comparison makes it easy to compare either personal legal insurance, motorist legal insurance or bundled personal and motorist legal insurance.
• Criminal cases when you deliberately commit a crime.
• Finance. Disputes related to asset management, banking and investment are generally excluded from legal insurance coverage.
• Self-employment. You can add occupational coverage as a rider on some policies.
• Disputes with tenants. Landlords can take out specialized legal insurance for homeowners.
• Intellectual property rights. The general legal consultation benefits which come with some policies can be applied to intellectual rights consultation in some cases.
• Political and religious cases. Many legal insurance policies specifically exclude coverage for legal action related to political or religious activities.

4. What are the disadvantages of personal legal insurance?

Insurance providers have the right to terminate your policy after fulfilling a claim. Although Swiss insurance providers rarely exercise this right, the rate of legal insurance policy terminations is higher than that of many other kinds of insurance. The terms and conditions of legal insurance policies generally give insurance providers the right to withhold benefits when a case is deemed to be impossible to settle. If the estimated cost of litigation is very high, insurance providers can provide reasonable financial compensation instead of committing to cover legal expenses.

Some legal insurance policies give you free choice of lawyers, while others only cover partner lawyers. Having free choice of lawyers is advantageous because you can choose a firm which specializes in the case and you avoid conflicts of interest with your legal insurance provider.

5. Verdict

Getting personal legal insurance only makes sense if your lifestyle puts you at risk of legal charges. Consider the various aspects of your life which could result in legal cases. If you feel at risk of legal action, take the time to find a policy which covers all of the specific aspects on your list.

If you require legal consultation at least once every two years, getting personal legal insurance often makes financial sense. Just the legal consultation benefits which you get with some insurance policies can make up for the cost of premiums.

The unbiased legal insurance comparison on moneyland.ch makes it easy to compare personal legal insurance offers based on the specific coverages you need.

More on this topic:
Legal protection insurance comparison
Motorist legal protection insurance explained