LEGAL PROTECTION FOR YOU AND YOUR BUSINESS
All businesses have to operate within a strict framework of regulation and legislation. Regardless of size they may:
Employ staff… run premises… deal with customers… work with suppliers… and, of course, pay their taxes!
When legal problems occur larger organisations are usually in a better position to respond, both in terms of expertise and financial resources. Some will have in-house experts or arrangements with law firms to help deal with the situation and budgets set aside to cover the costs.
But what about other firms… the smaller businesses that make up over 95% of the private sector? What can they do when facing legal problems? Who can they turn to for help, and how can they cover these unforeseen costs?
Well some will ignore the problem and just hope it just goes away.
Others may accept the situation and move-on, chalking it up as ‘experience’.
Some may even try the ‘do-it-yourself’ approach and search the internet for legal answers.
As a final resort, or if the problem is serious, firms may bite the bullet and pay a high street law firm to act for them.
All-in-all a daunting, stressful and potentially very costly time for any business.
There is, however, a form of insurance that can help protect businesses from the costs of unforeseen legal disputes… ‘legal expenses insurance’.
A commercial legal expenses insurance policy can offer expert legal advice and cover the cost of a lawyer to represent the business should they find themselves facing common legal disputes.
And because it can be more affordable than using high street law firms, it makes legal representation accessible for every business… whatever their size.
For example, it may help if a business is having a problem with an unhappy employee who is taking their dispute to an employment tribunal.
Or the business may be facing prosecution following an accident in the workplace.
Maybe next door’s vehicles have been blocking access by parking their vehicles in the wrong place, yet again!
In each of these cases, the business can get telephone advice from a legal professional knowing that if the problem escalates their policy may cover the cost of a lawyer to act on their behalf.
In terms of employment disputes the cover will usually also pay any compensation awarded following an unsuccessful employment tribunal case.
Please note there will be limits to the maximum amount of costs and compensation payable under the policy and these will be shown in the policy wording.
There are also lots of other ways commercial legal expenses insurance may help including cover for contract disputes, recovering debt, tax enquiries and motoring prosecutions.
As with all insurance policies, there are important terms and conditions to bear in mind, some of the key ones are:
- The event must be covered by the policy and not have started before the date cover begins.
- Any legal costs incurred before we have agreed to cover the claim will not be reimbursed by the policy.
- And for new policies, waiting periods may apply – these are defined periods of time during which certain claims will not be accepted.
And finally, a couple of points to understand regarding the process of claiming under a commercial legal expenses insurance policy.
First of all we will check the claim is covered. If it is then a lawyer is appointed who specialises in the area of law relating to the claim.
This lawyer will then assess how likely it is that the legal case will be successful. This is referred to as ‘prospects of success’ and it’s worth noting that this is a normal part of how the legal process works.
If the lawyer believes the case is more likely than not to be successful, they will take on the claim and the legal costs will be covered up to the amount shown in the policy wording. This also includes the other side’s costs if the case is lost.
Please bear in mind that prospects of success can change throughout the case. If at any time the lawyer doesn’t believe the claim is likely to be successful then the insurance policy will stop paying the legal costs.
But as long as the lawyer believes the case is more likely than not to be successful we will continue to support the claim.
So that’s commercial legal expenses insurance in a nutshell… if a business wants advice and assistance with legal problems and cover for unforeseen legal costs it could prove to be a valuable addition to their insurance.
For more information speak to an insurance adviser.