Legal Expenses Insurance

Legal Expenses insurance - Legal Pursuit and Defence Costs

Legal expenses insurance provides the ability to both pursue and defend your businesses legal rights in a cost-effective manner.

The risks in ‘doing business’ are ever-increasing in an environment of increased consumer rights, heightened compliance and regulatory risk, and increasing tendency of people, businesses and regulatory bodies to litigate or prosecute first rather than take a more conciliatory approach.

It is well known that the cost of legal expertise can be over-bearing to the point, it can affect the ability to both defend and prosecute your case. Legal Expense insurance allows a business, small or large, to obtain insurance to cover unexpected costs that can arise relating to contractual or license obligations as defined.

Though a business should ensure they have “Core” risks insured such as Liability, Professional Indemnity, Cyber and Management Liability (Directors) insurance where appropriate, Legal expense insurance can provide supplementary coverage, and additional coverage in certain areas.

Examples of Legal Expense costs insured are:

• Pursuit and defence of contractual disputes with both customers and suppliers
• Appeals against notices under WHS Acts; OH&S Acts; ACCC and similar legislation
• Landlord-Tenant Property Disputes
• Appeals against suspensions, revocations, alterations or refusal to renew Statutory Operations licenses
• Pursuit of past employees breaching restrictive covenants
• Privacy Act Data Protection disputes
• Investigations by the Australian Taxation Office

Examples of Legal Costs not covered by Legal Expense insurance are:

• Involving certain contract types such as Credit, Insurance, Building, Motor Vehicle
• Franchise agreements
• Employment contracts other than restraint clauses
• Traffic offences
• Non-payment of rent
• Tenancy renewals or Property Purchases
• Changes industry-wide to statutory operating licencing requirements
• Driving Licenses

Typically, standard type policies provide defence cost coverage, however, the defence costs must relate to the type of coverage taken.

For example, Liability policies will only provide coverage for defence costs only that relate to injury or damage to Third Parties. For example, if a member of the public slips and falls in your premises, and you are sued for both injury and economic loss suffered by that person, then subject to you having Public Liability insurance, your legal defence costs will be paid by the Public Liability insurer.

Legal Defence cost provides additional coverage for Legal Pursuit and also Defence costs for some common issues that are not covered under standard policies.