- Insurance Solutions
- Products
- Legal Expenses
Legal Expenses
What is Legal Expenses Insurance?
Legal Expenses Insurance provides businesses with cover for legal costs and expenses incurred while defending or pursuing legal actions. It protects against the often high costs of legal disputes, whether arising from employment issues, contract disputes, or regulatory investigations.
What are the coverage areas?
This insurance can offer peace of mind, knowing your business is financially protected when legal challenges arise.
- Covers legal costs if an employee brings a claim against the business for issues such as unfair dismissal, discrimination, or breach of employment rights.
- Includes representation at employment tribunals, as well as covering compensation awards in certain situations.
- Provides cover for disputes relating to contracts with suppliers, customers, or service providers. This can include breach of contract claims, unpaid invoices, or disputes over the quality of goods or services.
- Covers the cost of defending the business during an HMRC investigation, whether related to VAT, PAYE, or corporation tax.
- Legal expenses for appeals against HMRC decisions are also typically covered.
- Protection for legal disputes involving your commercial property, such as issues with landlords, neighbours, or lease agreements.
- This could involve disputes over property damage, rent arrears, or disagreements concerning tenancy terms.
- Legal defence costs if the business or its directors are accused of committing a criminal offence in connection with the business. This may include defending against allegations of corporate manslaughter, fraud, or data protection breaches.
- Legal costs associated with disputes over business licences, such as those required for serving alcohol, broadcasting, or operating certain types of premises.
- Legal expenses involved in recovering unpaid debts owed to the business by clients or customers, covering legal fees for pursuing claims through court if necessary.
Insurance With A Purpose
Key types:
Comprehensive Legal Support: Many policies come with access to a legal advice helpline, offering businesses support for everyday legal queries or emerging issues, helping to avoid disputes before they escalate.
Representation and Court Costs: The policy covers the cost of legal representation, solicitor’s fees, barrister’s costs, court fees and expert witness charges, whether pursuing or defending a legal action.
Pre-emptive Legal Advice: Legal Expenses Insurance can include advice to help businesses stay compliant with ever-changing regulations, reducing the likelihood of disputes or regulatory issues.
Benefits:
Cost Savings: Legal disputes can be very expensive, especially if they result in court proceedings. Legal Expenses Insurance shields businesses from paying significant legal fees, allowing for predictable financial planning.
Business Continuity: By covering legal costs, this insurance ensures that legal disputes do not financially destabilise the business, allowing it to continue operating with minimal disruption.
Specialised Legal Representation: Policies often provide access to experienced solicitors and legal experts who specialise in commercial law, employment law, or other relevant areas, ensuring that businesses get expert advice and representation.
Coverage for Small and Medium Enterprises (SMEs): For SMEs that may not have the financial resources for large legal battles, Legal Expenses Insurance can be a crucial safeguard, making it affordable to take legal action or defend against claims.
Key Considerations:
Policy Limits: Policies will have financial limits on the amount of legal costs they will cover. Businesses should ensure they select a policy with adequate limits based on their size and industry, as legal costs can escalate quickly.
Exclusions: As with all insurance policies, there will be exclusions. Common exclusions may include fraud, deliberate breaches of regulations, or disputes that arose before the policy began. Carefully review the policy wording to understand what is not covered.
Waiting Periods: Some policies may have a waiting period before claims can be made, typically 90 days. This means the policyholder cannot claim for disputes or issues that arise within this period after the policy starts.
Choice of Solicitors: Some insurers may require you to use their panel of solicitors for legal representation. It’s important to confirm whether you can choose your own solicitor, as this could impact your decision when selecting a policy.
Choosing a Legal Expenses Insurance Provider:
Industry-Specific Coverage: Select an insurer with experience in your industry. They’ll have a better understanding of the unique risks and challenges your business faces and can offer more tailored coverage options.
Claims Process: Ensure the provider offers a simple, transparent claims process with clear communication. In legal matters, time is often of the essence, and delays could impact the outcome of a case.
Legal Advice Services: Many providers offer legal helplines or advice services as part of their policies. This service can be invaluable for day-to-day legal queries, helping you prevent potential disputes from escalating.
Speak to our Legal Expenses
Expert Advisor
We understand the importance of having easy and accessible ways to get in touch with us. That’s why we’re excited to offer you a way to connect directly with our Senior Team quickly and conveniently.
Nicola Wyatt
Senior Insurance Practitioner
