Legal Expenses Insurance

Published: 03rd June 2011
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Legal expenses insurance covers the cost of taking or defending legal action when you or your business becomes involved in a dispute with someone else. It will cover things like solicitors/barristers fees, court costs, expert witnesses and any compensation or the other sideís legal costs should you be ordered to pay them. Two main types of legal expenses insurance are available in the UK: Before and after the event (BTE and ATE).

Before The Event Insurance

This is a policy which is bought before the dispute begins. Most businesses will want BTE legal expenses insurance as there is a high chance of them becoming involved in legal proceedings at some time in their activities. Before the event insurance is often included in business insurance packages as well as home and car insurance.

After The Event Insurance

This is a policy which can be purchased after the accident or dispute which is resulting in legal proceedings has occurred. In most cases the legal advisors you are working with will require you to take out this insurance before they proceed with your case, so that expenses will be covered in the event of the claim being unsuccessful.
Legal expenses insurance is commonly used to cover legal proceedings resulting from car accidents, recovery of uninsured losses, consumer disputes and minor injuries. The types of dispute covered will be outlined in the policyís terms and conditions, as well as the maximum amount that can be claimed, which is usually either £50000 or £100000.
Pursuing legal action without the protection of a comprehensive legal expenses insurance policy is not usually advisable; even if you have a strong case there is still chance you could be unsuccessful and end up having to pay significant damages on top of the other sideís legal costs.

Limitations

The biggest limitation of legal expenses insurance, particularly with before the event cover, is that it will be up to the insurance company whether your particular legal issue is eligible for cover or not, they will have to be convinced that you have at least a 50% chance of success in the case and may require you to work with a solicitor who they are affiliated with. For this reason itís important that you speak to your insurer about your intention to claim before you seek any legal advice for which you may be charged, or to ask the solicitor you choose about legal expenses insurance if you donít already have a BTE policy in place. For more information head to www.lawontheweb.co.uk.

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