I also had in mind that you can only protect your wallet file once.
I've been playing around some more - I definitely have no way of doing both on the same wallet file. I supposed I could import all my addresses from my Ledger protected wallet file to a password protected watch only wallet file, but if there is the option to do both on the same wallet I'd like to know. 
Yes after syncing my Ledger with Electrum I was given an option to encrypt the new wallet but doing so would require that I connect my Ledger wallet every time I want to open my Electrum wallet to view the balance.
This is correct.How did you password protect your wallet file instead? Did Electrum give you an option to do that, or did you use a different program?