Understanding your protection
Key areas of legal expense insurance
Depending on the policy wording, coverage may include eligible legal expenses related to:
Contract disputes
Contract disputes with customers, suppliers or vendors, such as disagreements over payment, delivery or the terms of an agreement.
Employment disputes
Disputes involving employees or employment-related matters, such as claims related to dismissal or workplace practices.
Criminal and regulatory defense
Criminal and regulatory defense proceedings, such as investigations or prosecutions connected to your business activities.
Property disputes
Property disputes affecting business operations, such as disagreements with landlords, tenants or neighbours over the premises you own or occupy.
Personal injury recovery
Personal injury recovery actions, where legal action is taken to pursue compensation for an injury suffered by an insured person.
Tax disputes
Tax audit disputes and certain tax-related investigations, such as an in-depth review of your business records by a tax authority.
An important protection
Why to consider legal expense insurance
Legal costs can quickly impact a business’s finances, even when the amounts in dispute are relatively small. This coverage can help businesses:
- Manage the cost of legal representation
- Access professional legal guidance
- Respond to employment and contractual disputes
- Navigate tax audits and regulatory matters
- Protect cash flow from unexpected legal expenses
With access to legal information and advisory services, policyholders may be able to address issues before they become costly disputes. For businesses without in-house legal counsel, access to experienced legal professionals can be a valuable resource.
FAQs for legal expense insurance
Coverage can include eligible legal expenses involving employment, contract, tax, licensing and property disputes, depending on the policy.
Legal expense insurance is designed to help cover eligible legal costs. It does not generally cover:
- Fines or penalties
- Punitive damages
- Court awards or settlements payable by the insured
- Expenses incurred without prior approval where required by the policy
It is important to report potential disputes early, as policy conditions may affect coverage if legal action is taken before notifying the insurer.
No. Legal expense insurance covers eligible legal expenses, not damages your business may ultimately be required to pay.
Yes. It may be purchased separately or available as an addition to other types of commercial insurance.
Premiums depend on factors including your coverage, revenue, number of employees and type of business.
It can be useful for small and medium-sized businesses that do not have dedicated in-house legal counsel.
