Updated: February 21, 2020

Business Legal Protection Insurance

Looking to provide legal protection for your business? Our expert advisors can help you find the right policy

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Richard Angliss

Author: Richard Angliss - Finance Expert

Updated: February 21, 2020

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.

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.

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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.

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We can help! We know everyone's circumstances are different, that's why we work with brokers who are experts in business protection insurance. Ask us a question and we'll get the best expert to help.

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Richard Angliss

Richard Angliss

Finance Expert

About the author

Richard Angliss has made a career in financial services which stretches over 40 years.

His early career was spent learning about the various financial products and applying them to prudent advice, working for one of the largest life assurance and investment firms. After that he joined the financial services arm of a very well-known firm providing independent advice to their 8 million customers.

For the last 20 years he has been involved in building software solutions that help Advisers and clients work together to achieve good financial outcomes and helping to set up three independent advisory firms. He also has written many articles for financial services publications and provided commentary for newspaper journalists.

At an early stage in his career he realised the great satisfaction that comes with being able to help people achieve their goals and protect their families. “Regulation of financial services has hugely impacted on ensuring people get appropriate advice. The issue these days is access to that advice and just as importantly regular reviews to make sure that everything stays on track”.

With the growing development of online resources such as Online Money Advisor he sees a great future for people to access advice to make their pension and investment work harder for them.  Plus, of course, to ensure they have insurance products in place that will be required when unforeseen events happen.

He knows getting that balance right is crucial to prudent financial planning and the wellbeing of individuals and their families.

FCA Disclaimer

*Based on our research, the content contained in this article is accurate as of the most recent time of writing. Lender criteria and policies change regularly so speak to one of the advisors we work with to confirm the most accurate up to date information. The information on the site is not tailored advice to each individual reader, and as such does not constitute financial advice. All advisors working with us are fully qualified to provide mortgage advice and work only for firms that are authorised and regulated by the Financial Conduct Authority. They will offer any advice specific to you and your needs.

Some types of buy to let mortgages are not regulated by the FCA. Think carefully before securing other debts against your home. As a mortgage is secured against your home, it may be repossessed if you do not keep up with repayments on your mortgage. Equity released from your home will also be secured against it.

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