Legal expenses is not a legal requirement, but may be included as standard, or can be added as an optional extra to your buildings or contents insurance policy.
Legal expenses essentially gives you access to legal representation in the event of specified legal disputes. For an insurer to accept your legal claim, there is also usually a need for there to be a ‘reasonable prospect of success.’ This will usually be on the advice of your insurers’ solicitors, and there often needs to be more than a 50% chance of success for your claim to be accepted.
If you’re unsure whether you already have this cover, it’s worth speaking to your insurer to double check. In the meantime, here’s a breakdown of the most common covers provided by legal expenses insurance.
This will cover the policy holder in the event of a dispute arising from their contract of employment, such as unfair dismissal. However, bear in mind that this does not usually include personal injury, or any disciplinary or grievance hearings.
If you have cover for contract disputes, your insurer will negotiate on your behalf any contract dispute whereby the policy holder has bought or sold goods or services as a condition of that contract. For example, if a customer has not paid you following a provision of service, your insurer will cover the legal costs should you be required to take them to court for the funds.
Under the personal injury section, you will be able to claim if a third party has caused bodily harm to you. This does not usually include illness, psychological injury, or gradual injury. The insurer may also offer legal protection in the event of a counter-claim (if, for example, the company that caused injury to you tries to counter-sue). Check your policy documents for more details as to the different injuries that are covered under this section.
Property protection will cover you in the event of a civil dispute relating to your main home (the property that’s covered under your policy). This could be physical damage, or even trespass. For example, if your next door neighbour continuously uses your back garden as a shortcut, despite there being no access agreement in place.
It’s important to bear in mind that legal expenses cover added on to your home insurance will usually not extend to cover disputes regarding a motoring incident, or anything to do with your vehicle. These disputes are usually covered under the legal expenses section on your car insurance policy.
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