What is Legal Expenses Insurance and what is it for?
Legal expenses insurance policies (LE for short) provide financial cover for you to either defend yourself or to actively help you bring a case against someone.
LE Cover is probably the most common add-on for business, motor or house insurance.
It is a genuinely useful product that is poorly understood.
In most house insurance policies, the legal expenses cover is usually available to all family members.
However, some policies provide cover ONLY to the policy holder! – it’s worth checking.
Examples of these policies might be:
- Military Kit & Contents policies where cover is restricted (NOT our Military kit policies);
- Specialist policies (like Bike insurance) might have a LE benefit but with a much narrower range of disputes covered.
TIP: Check your Home and Contents cover to see if your family is covered and, while you’re at it, see if your bike is covered and you don’t need another costly policy.
Common levels of cover range from:
- £25,000 up to £100,000 for businesses.
- £50,000 – £75,000 for private individuals.
How do I get the right LE policy?
The cheapest way is as part of a standard policy but, it can be bought separately.
First:
- Make sure the policy meets your needs. Then;
- Check the list of types of disputes that are covered. A good policy will have a wide range and you can expect cover for:
- Employment disputes
- Contract issues
- Clinical Negligence
- Personal Injury (if you need to sue someone)
- Loss of earnings (to attend court)
- Property (though usually this excludes building and land)
- Legal defence in a police case
- Identity Theft
- Tax Issues
- Legal Help – see below
Special Feature – Legal Help
Potentially, the most useful benefit is a Legal Help line.
Help lines can provide ‘reassurance’ and advice regardless of what happens next.
They are usually manned 24/7, free and available whenever and as often as you need them – often the only limit is “fair usage”.
You can use the help line from the very start to see if you have a legitimate claim.
How does the Policy work?
- Contact the ‘help line’ and explain the issue to your insurer.
- Provide the insurer with evidence to show that you are more likely to win than lose.
- If you have a good case, they will provide quick support and access to funds.
- You may be asked to get some preliminary advice from an independent solicitor.
The insurer expect updates from your solicitor to follow your case and pay your fees up to the limits of the policy.
Things to note.
The insurer will:
- Expect you to use the fund carefully when it comes to how the case fought.
- Require you to be ‘reasonable’ if there is a prospect of a fair settlement.
- Not normally fund you beyond a fair and agreed reasonable ‘outcome’ even if law is on your side.
You can use your own funds if you do not accept the insurers’ legal view at any point in the process.
The same principles and guidance we shared for making a claim apply to preparing to get legal help. In essence – keep all receipts and letters/emails, take photographs, get contact details of witnesses, inform the police/authorities.