Legal Expenses: What to consider

Running a business can be very rewarding, but it can also bring worries. Your clients, suppliers and employees; these interactions and relationships all come together to make your business unique. However, the problem with all of these encounters is that they bring the potential for disagreement or dissatisfaction and possibly a costly and stressful legal dispute; the last thing you need when you are putting everything you have into making your business a success.

Legal expenses cover is an insurance policy taken out or added onto an existing policy, to provide financial assistance in paying legal fees should you find you or your business in a position that requires the assistance of a lawyer or legal adviser

The most common form of legal expenses cover is taken out on a ‘Before the Event’ basis. This particular cover provides financial legal costs protection in case a legal dispute occurs.

Alternatively, Legal Expenses cover can be taken out ‘After the Event’, where financial assistance is required against the risk of losing a legal dispute, where the insured, could be liable for paying the legal fees of the opposing side of the legal dispute.

Legal Costs and Expenses

Insurers could also indemnify you for legal costs and expenses which you may be legally obligated to pay due to a claim in connection with your professional services.

Depending on the nature of the business you are in, you can extend the level of legal protection required to suit potential risks. These extending covers include:

  • Employment matters
  • restrictive covenants matters
  • tax enquires
  • property matters
  • legal defence
  • compliance and regulatory events
  • statutory licence events
  • loss of earnings
  • employee’s extra protection
  • contract and debt recovery
Motor Legal Expenses

Motor insurance legal expenses typically covers events that arise from the use or ownership of an insured vehicle. This may include taking action against a third party for negligence, or defending disputes made against the insured by a third party.

Legal Expenses Cover for Property Owners

If you are a resident living in a block of flats or an apartment block, you’ll know that the insurance of the building is a responsibility which is jointly shared. Whether you have an appointed company, the freeholder of the building or are undergoing the Right-To-Manage process, Legal Expenses can be combined with a range of policies to provide protection

Although it is possible to buy stand-along legal expenses insurance, for non-motor policies, the majority of legal expenses policies are added on to buildings and contents or directors’ and officers’ policies.

More often than none, the insured will also find that the covers in their policy are insured by different providers. This is to avoid conflicting interest. In order to help you gauge an understanding of the importance of a combined policy including legal expenses, our claims department has highlighted a common legal dispute that can occur to residential block property owners:

‘A resident in an apartment block campaigned for the removal and election of a new board. The chairman of the board wrote to his fellow residents to point out errors in allegations made against him. It happened that the resident making the allegations was a barrister who viewed the response as libellous. Although the barrister never followed up her allegations at the court hearing, the D&O policy funded not only the legal advice, but the legal representation costs as well, amounting to over £20,000.’

This particular dispute can happen to property investors, developers, managing agents or landlords. Ensuring that your current insurance policy includes Legal Expenses cover can protect against being faced with large legal fees.

General Legal Expenses Cover

Regardless of the size or nature of your business, Adler Insurance Brokers can advise you on the most suited cover. Our general Legal Expense insurance can offer the following core advice services as standard:

  • Criminal prosecution subject to inner limits of £2,500 in any one claim
  • Employment disputes
  • Tax protection
  • Property disputes, pursuit or defence
  • Data protection against claims
  • Statutory licence
  • Personal injury
  • Jury service allowance

Legal Expenses insurance comes in various forms; you may require a complete packaged solution or specific areas of cover. Adler Insurance Brokers can support your business by giving clear professional help with a different approach based on minimising your exposure to potential risks, delivering genuine added value and high quality.

To find out how we can help protect your business, give us a call today on 0121 764 5500 or email info@adlerinsurance.co.uk.

Adler Insurance

Content creator for the Adler Insurance Group.