Legal expenses

Legal Expenses Insurance

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Legal expenses insurance for small businesses

No matter how well you run your business, at some point, you may be faced with legal action. Even if you can prove that you’re blameless, the legal process itself can end up costing you a lot of money.

This, in turn, can leave you out of pocket and could potentially disrupt your business operations. Adding Legal expenses insurance to your professional indemnity insurance package can help cover you in these situations.

Business legal expenses insurance can help cover your legal fees and expenses resulting from your business activities for a range of situations. You can add it to your business insurance package along with the core cover of professional indemnity and other covers such as public liability.

With legal expenses cover, you can help protect your business against the potential costs of legal action from employment tribunals, tax investigations, or civil action brought against your business.

Speak with us to find the right level of legal expenses cover for your business needs.

What Does Legal Expenses Insurance Cover?

Disputes over contracts

If you or another party believe that a contract between you has been broken, legal expenses insurance as part of your professional indemnity package can help cover the legal fees.

Investigations for criminal activity

If your business is accused of and prosecuted for criminal activity, legal expenses cover can help pay for representation.


Data protection breaches

If there is a breach of confidential data then legal expenses insurance can cover you for civil action.

Frequently Asked Questions about Legal Expenses Insurance

What’s legal expenses insurance for?

Legal expenses insurance offers you and your business cover in the event that legal action is brought against you as a result of your business activities.

No matter how well you run your business, you may face a legal challenge that could be costly.

Having legal expenses cover in place can help ensure that you’re protected against action that could arise.

This could be due to claims relating to employment disputes, injury, damage to equipment and property, or a breach of duty under employment legislation.

Does professional indemnity insurance cover legal fees?

Professional indemnity insurance is designed to protect your business if you have not fulfilled a service to a client’s satisfaction. This can range from inaccurate advice, a mistake in handling a request, or other situations where the client is dissatisfied.

Such a situation could result in legal action, and so professional indemnity insurance is there to help cover compensation claims

However, professional indemnity insurance won’t cover other legal costs such as if you are injured or your business property is damaged and you decide to take legal action, or if you’re involved in tax or employment disputes.

For example, if someone brings action against you due to a breach of contract, this may not be covered by your professional indemnity insurance.

It’s a good idea to consider legal expenses insurance to help cover legal costs not covered by your professional indemnity insurance.

What isn’t covered by legal insurance?

There may be limits on how much of your claim will be covered. In addition, not all costs, fines or penalties incurred will be covered automatically – you’ll need to speak to your insurer first.

Your insurer may ask you to ensure you’re following correct procedure, or that you take their legal advice first.

To find out more about what is and isn’t covered by a legal expenses insurance policy, please speak with our team.

What can affect my legal insurance claim?

Some of the factors that can influence your claim include:

  • How close the date of the legal proceedings you claim for is to when you purchased the policy. For some claims, you may not be covered for the first 90 days of the policy.

  • Your claim exceeds the limit for which you’re covered.

  • Failure to notify your insurer of an event that could lead to legal action or being too late to notify your insurer – you should report a claim to your insurer within 180 days of when you should have known about the incident.

Do you need customised business insurance for your company?

Or speak to us for advice and recommendations customised to your business needs.