Mixed services · subcontracting · legal tech
Professional indemnity insurance (BAV) for a legal services organisation
A legal services organisation rarely delivers one thing. Contract management, debt collection, secondment and a portal in one proposition means that one policy has to cover several professional capacities.
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Deze pagina in het Nederlands: Beroepsaansprakelijkheidsverzekering voor een legal services-organisatie.
The calculator and the quote form below are in Dutch. Prefer to do this in English? Email info@finassverzekert. nl or call 072 - 509 24 56 and we will take it from there.
Work out for yourself what it would cost.
Enter your details; you will receive a proposal within one working day.
- We compare the offerings of several insurers
- An adviser checks whether the cover suits your activities
- We arrange the switch, including cancellation
A premium indication, not personal advice. Prefer to talk it through? Call 072 - 509 24 56.
In brief
What makes a legal services organisation vulnerable is not the complexity of the legal work but the breadth of the range of services. A claim is tested against the professional capacity on the policy schedule. If that says only 'legal services', it is arguable whether a debt collection process, managing a contract database, seconding lawyers and offering automated model agreements all fall under it. Have every service line named in so many words. How this product works in principle is described on the hub page on the BAV.
The loss is of a different nature for each service line. In contract work it is a clause that does not stand up. In debt collection a limitation that has not been interrupted as Article 3:317 of the Dutch Civil Code requires, or enforcement against the wrong party; in secondment the conduct of your lawyer at the client. In legal tech a model document with an error that ends up in hundreds of contracts. The last is the sharpest: one mistake in a template scales with your volume. So ask expressly how the policy treats related claims: are they seen as one claim, or as many separate ones?
If you work with subcontractors, freelancers or a partner network, the question is who is an insured person. For the conduct of auxiliaries you engage you are liable to your client under Article 6:76 of the Dutch Civil Code, even where the mistake was not made by you. Include in your purchasing arrangements that the subcontractor maintains their own professional indemnity insurance, and have it recorded on your own policy that third parties you engage fall within the class of insured persons.
This page deals with one situation. The full overview is on Compare professional indemnity insurance (BAV).
Where a mixed practice comes unstuck
Four points that weigh more heavily than the sum insured in an organisation with several service lines.
Software and portals are a risk of their own
If you supply an environment in which clients assemble documents themselves, your role shifts from adviser to supplier. Downtime, a wrong version of a template or loss of data is then a failure in a product and not in advice. Many policies exclude loss caused by the functioning of software supplied or require a separate technology clause. Ask about it before you take the service live.
Personal data belonging to your client's customers
Contract databases, debt collection files and due diligence material contain personal data for which you are usually the processor. If that leaks, the cost of investigation, recovery and notification is not pure financial loss arising from a professional error. Those costs belong on a cyber insurance. Fines from the Autoriteit Persoonsgegevens are not insurable anywhere, because they are a sanction.
Secondment: who carries the mistake at the client?
If you place lawyers with clients, you carry the risk of their conduct there. Arrange for the staff placed to be insured persons on your policy, including where they work for you under a contract for services. Also watch for purchasing terms in which the client stipulates unlimited liability or an indemnity; liability accepted by contract that goes beyond the law is excluded as standard.
Acquisitions, demergers and the run-off gap
If you grow by acquiring businesses, the files come with them but the cover does not follow automatically. Because the BAV works on a claims-madebasis, what matters is whether, at the moment of the claim, there is a policy in force that covers the acquired entity's past. On every transaction, arrange retroactive cover for the past or have the seller buy run-off cover, and record that in the purchase agreement.
What does your premium depend on?
- Turnover per service line: advice, debt collection, secondment and software are weighed separately
- Number of legal staff: determines the size of the group of insured persons
- Use of subcontractors: and whether they are insured themselves
- Standardisation of documents: templates magnify the effect of one mistake
- Client base. SME, corporate or public sector clients
- Retroactive date on acquisitions: how far back the past of acquired entities is included
Insurers weigh these details differently. That is where your saving is.
What is covered
| Situation | AVB | BAV |
|---|---|---|
| In a debt collection file a limitation is not interrupted and your client's claim lapses | No | Yes |
| A seconded lawyer assesses a lease incorrectly at the client and the client suffers loss | No | Yes |
| A debtor is sent a demand although he had already paid and claims his costs from you | No | Provided that |
| A visitor falls over a loose cable in your office building | Yes | No |
| A participant is injured during a training course you give in your own room | Yes | No |
| A client demands back the annual fee for contract management because the service did not satisfy | No | No |
For every service line the first question is whether it is stated in so many words in the stated professional capacity.
Frequently asked questions
This is what people ask us most.
Our services change quickly. How do I keep the policy up to date?
Report every new service line before you offer it. On an application or an amendment, the duty of disclosure in Article 7:928 of the Dutch Civil Code applies. If it turns out afterwards that the insurer accepted the risk on incorrect or incomplete information, it can rely on Article 7:930 DCC and reduce or refuse payment. Going through your service catalogue with your adviser once a year is the simplest way to secure this.
Are settlements and defence costs included?
As a rule yes, but subject to conditions. The insurer usually handles the claim and must agree in advance to a settlement or to instructing a lawyer. If you admit liability yourself or reach an arrangement without consulting them, you risk the costs not being paid. Defence costs also often count within the sum insured and do not come on top of it.
What about work for foreign clients?
Most Dutch policies cover claims judged under Dutch or European law. Claims under American or Canadian law are excluded almost as standard, and work under another legal system calls for an extension. Report it if you regularly advise on foreign law or conclude contracts with a choice of forum outside Europe.
Do we also need public and employers' liability insurance?
Yes, as soon as you have an office with staff. The BAV covers financial loss arising from professional errors; injury to a member of staff or a visitor and damage to rented premises or third-party equipment fall outside it. For that there is public and employers' liability insurance, including the employer's liability section that matches the duty of care in Article 7:658 of the Dutch Civil Code.
Read more
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