Running a business can be challenging but this will be all the more so in these uncertain times as we embark upon the ‘new normal’ post-lockdown. There are many legal and other pitfalls that can beset a business, including non-payment of a debt by a customer, contractual disputes with customers, suppliers or agents, employment disputes and regulatory investigations, some of which are likely to arise more frequently in the coming months. Dealing with these issues can divert time and resources from your business and worse, could expose your business to legal costs, which can be considerable.
One useful and relatively inexpensive way of insulating your business from legal costs is through suitable legal expenses insurance.
Legal expenses insurance or “LEI” is an insurance policy which will pay your legal costs and/or adverse costs in certain circumstances and is an insurance option that merits consideration for all business owners.
Such policies will indemnify your legal costs as well as adverse costs in cases where there are reasonable prospects of success or recovery and can remove the potential financial stress which is often associated with the decision to embark on litigation, or when defending litigation instigated by another party.
LEI policies will often cover the costs incurred in employment matters and in some cases even compensation awards; criminal or regulatory investigations into business practices, trading standards investigations, health & safety prosecutions, property protection, legal defence and statutory licence appeals. Many businesses require a statutory licence in order to trade; those businesses involved in transport, waste management, require such licence and any interference or curtailment of the licence can attract LEI cover. Moreover those businesses whose conduct is regulated by a professional body may similarly be able to avail of LEI. Indeed some professionals particularly those in the medical profession regulated by the HCPC, might also be able to rely on LEI if disciplinary investigations are commenced by the Professional body. Some commercial policies also extend LEI cover to your employees.
If your business does not already hold a pre-existing LEI policy, you should speak with your broker about your options with a view to adding this on to your cover now or at the time of renewal. Worthingtons have considerable experience of representing clients under the cover of legal expenses Insurance and can assist with reviewing your policy documents and applying for an indemnity for your case under your LEI policy, or assisting with an application for ATE Insurance which is available if no pre-existing LEI cover is in place. If you require assistance, please get in touch with the Litigation team at Worthingtons on [email protected] or 028 9043 4015.
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