This paper gives an account of the historical development of legal expense insurance as a branch of insurance aiming to cover all legal expenses that the policyholder may incur in a situation in which they are in need of legal aid. The history of legal expense insurance can be divided into four periods. The first period, which lasted until 1917, was the time which saw the emergence of some basic forms of associations who assumed the duty of paying legal costs incurred by their members (La Sou Medical 1897, Physicians’ Defence Company 1899, Schutzverein deutscher Reeder 1901, Versicherungsverein der Haus- und Grundbesitzer A.G. 1910). The second period began in 1917 in Paris with the foundation of DAS, the first mutual company offering legal expense insurance. The company provided coverage for legal expenses for anyone who signed an insurance policy. However, it was initially particularly oriented towards providing the coverage for car owners and sportsmen. By the beginning of World War II, DAS expanded to neighboring countries (Germany, Belgium and Switzerland) and a number of new legal expense insurers appeared on the market. The third period in the development of LEI began after the end of World War II, with the rise of automobile tourism. This period saw a massive increase in the number of legal expenses insurance policies throughout Europe. The emergence of legal expenses coverage which was not restricted to car owners added new impetus to the spread of legal expense insurance. Legal expense insurance is also regulated and coordinated at EU level by the Directive 87/344/EEC. Finally, the last stage in the development of LEI began at the dawn of the 21st century, and it is marked by close cooperation between legal expense insurers and attorneys (who sign partnership contracts). Furthermore, in order to reduce legal costs, or, in other words, their own costs, legal expense insurers take preventive measures and advise their policyholders on how to avoid situations which may lead to disputes.