Business Legal Protection Insurance
Could your business survive a costly legal dispute? From huge corporations to the smallest start-ups, all businesses are vulnerable to legal challenges from customers, rival companies or other entities – and without adequate protection, the associated costs can be devastating.
Putting the right insurance in place is, therefore, an essential part of running a business, and it doesn’t have to be expensive. In this simple guide, we’ll take a look at how business or commercial legal protection works, who needs it, and how the expert advisors we work with can help you find the right cover for your company’s needs.
This guide will cover:
What is business legal protection insurance?
Business legal protection insurance exists to provide the funds you might need to protect your company’s interests in the event of a legal claim brought against it. It pays out for the associated legal costs such as solicitors’ fees, hiring expert witnesses and barristers.
As with all types of insurance, you will need to find a policy that applies to your specific circumstances at the right level of cover, and some types of business may benefit from more specialist business legal protection than others.
What is covered by business legal protection insurance?
There are countless scenarios where a business may need legal assistance to defend itself, but the majority of cases fall into a handful of categories.
The most common among them include:
- Actions brought under GDPR (data protection)
- Tax enquiries
- Employment tribunal costs
- Commercial contract disputes
- Civil actions, lawsuits etc
How does it work?
In the event of a claim being brought against your company, business legal protection insurance provides access to legal assistance at no additional cost other than any excess you have agreed with the insurer.
This may be provided in the form of a telephone advice line to a team of legal experts provided by the insurer, and/or for more serious disputes, a payout to cover the funds you need for legal representation, up to the maximum sum you have covered.
You will need to have a policy in place before you can access legal cover, so for peace of mind, we recommend taking out appropriate insurance as soon as your business starts trading.
Do I need legal protection insurance for my small business?
If your business has contact with the public, with suppliers, or if you have even one employee, you are technically at risk of being sued, taken to an employment tribunal or threatened with a fine under GDPR. And as a business owner you can be investigated at any time by HMRC, even if you’ve done nothing wrong.
For these reasons and more, it’s certainly advisable to take out at least a basic level of legal protection cover, as smaller businesses can be hit particularly hard by any unexpected legal action, and in the worst cases, taken out of business altogether. Make an enquiry if you’d like to discuss small business legal protection insurance with one of the experts we work with.
How much does legal protection insurance cost?
This will depend on factors like the sum you want to insure, and on what features you want to include in your policy, which will in turn be influenced by the size and nature of your business. But standard business insurance should not be expensive, with many policies starting at less than £10 a month.
As with any insurance policy, you’re likely to pay a higher premium for additional features and higher levels of cover. If you run a specialist business (e.g. running a tattoo parlour) you may need to look into a more bespoke policy, which is likely to cost more, but will protect against claims that most businesses don’t need to worry about.
What are the alternatives?
The main alternatives to business legal protection insurance include representation by an in-house legal team or general counsel, and stumping up up the funds for any legal expenses from a company budget or one’s own pocket. Both of these options are likely to be inaccessible to all but the larger and more well-established corporations.
How to find the best legal protection insurance
With so many businesses needing cover, there are countless providers offering legal protection insurance, and as a consumer researching options, you may have to rely on each insurer’s own sales pitch. For this reason we recommend working with an experienced insurance advisor, who can help you navigate this busy market.
By working with an independent expert you will not only bypass the hours of research that finding the right policy can entail, you’ll also benefit from their knowledge of the market, including products that are not available directly to the public.
Speak to an expert on legal protection insurance
If you’re looking to take out a business legal protection insurance policy soon and would like some professional advice, the insurance specialists we work with are ideally placed to help you find the right policy at a price that works for you.
All of the advisors on our books operate independently, with access to the whole insurance market, so you’ll benefit from impartial advice that’s tailored to your unique business needs.
Call us today or get in touch via our quick enquiry form for an initial no-obligations chat.