Legal Expenses Insurance
Anything legal tends to worry most people and when you are in business, litigation can come from many directions. Then, of course, there’s employment issues, or maybe you could be unlucky enough to be drawn out the hat with the HMRC. When things do get a little uncomfortable having commercial legal expenses in place to assist allows you to carry on your business whilst someone else fights your corner*.
The other scary bit of course is the cost of using your own legals, somewhat eye watering. When you have commercial legal expenses insurance for your business, once you have paid the premium for the year you have access to advice and defence for your business!
Legal expenses Insurance not for you? Think again…
Let’s take a look at some of the covers and potential scenarios you may come across in your working day.
The following are standard covers provided under this insurance.
Employment Disputes and Compensation Awards
Having the best employees you could wish for makes absolutely no difference at all, the best relationships have disagreements that end in tears, and you and your employees are no exception. Just to make matters worse, when it comes to taking you to a tribunal it costs them absolutely nothing (at the moment anyway) so, what have they got to lose?
An alleged dispute can come from anywhere, unfair dismissal, constructive dismissal or others on the grounds of sex, race, and disability.
Don’t have employee?
Won’t affect you then will it… possibly yes actually. There are still many dangers even at interview stage, you can be accused of discrimination on similar grounds to those stated above.
As long as you have complied with the necessary requirements and regulations provided by the relevant legal bodies the Insurers will pay the basic and compensatory award and/or compensation awards arising from an alleged breach of an employee, prospective employee or ex employee’s statutory rights under employment legislation*.
This doesn’t actually mean you can do what you want and get someone to defend you. Health & Safety for instance is typical example, the defence is provided up until you are charged (if of course you were charged). A few areas, non-motor related prosecution, data protection act breeches, wrongful arrest, or actions brought against you for sex, sexual orientation, race, disability, age, religious belief or political opinion.
So what is the cover provided and what will the insurer do? Full Enquiries or Aspect Enquiries Insurers will provide a specialist who will negotiate on your behalf, and then if required represent you in any appeal proceedings.
Negotiating on your behalf and representing you in any appeal proceedings following an assessment issued by HM Customs and Excise in respect of Value Added Tax due.
(The following is taken from the Insurance Company “summary of cover”)
The following helpline services are available 24 hours a day, 365 days a year during the period of insurance irrespective of what covers are selected.
EuroLaw Commercial Legal Advice
Insurers will provide you with a confidential legal advice service over the phone on any commercial legal problem affecting your business subject to the laws of the member countries of the European Union, the Isle of Man, the Channel Islands, Switzerland and Norway.
Insurers will provide you with confidential advice over the phone on any tax matters affecting your business under the laws of the United Kingdom.
In the event of any unexpected emergency affecting your business premises which causes damage or potential danger, We will contact a suitable repairer or contractor and arrange assistance on your behalf. All costs of assistance provided will be your responsibility.
We will provide all employees (and members of their immediate family who always live with them) with a confidential counselling service over the phone including, where appropriate, onward transmission to relevant voluntary and/or professional services.
Negotiating on your behalf and representing you in any appeal proceedings in respect of a dispute concerning your compliance with Pay As You Earn or Social Security Regulations following a review by the Inland Revenue or the Department of Social Security Contributions Agency.
*Almost all legal expenses policies carry a clause which states that there must be a prospect of success.
In simple terms, you have not bothered to follow guidelines set out by the necessary authorities, or where you have not followed the advice given by your defence and due to this the outcome has been compromised to an extent that the prospects of success is reduced the insurer providing you indemnity has the right refuse you indemnity (not provide cover).
In all circumstances advice must be sought from insurers on how to handle any situation.
So there we go, now consider whether you need to be without this type of insurance cover.