Commercial conflicts are prevalent and can occur due to various reasons and considering the expenses of commercial litigation is crucial in the current economic climate. One has to consider not only their own legal expenses, but also the possibility of having to pay the other party’s fees, in the event that a case loses.

As a business owner, the chance of facing legal action is higher compared to an individual. Commercial legal expenses insurance (LEI) provides businesses with the opportunity to pursue a legal case without the worry of legal fees. This type of insurance aims to offer expert legal guidance on legal matters whilst safeguarding the business.

It is crucial to decide whether commercial LEI coverage, or other types of insurance, are suitable for your situation. Having an expert advisor by your side is essential in this regard. At Annecto Legal, we can help clients comprehend the details and secure the best offer.

One of the most common questions we hear is “what does commercial legal expenses insurance cover?” Below we have provided an overview on this type of insurance and detailed the aspects covered by commercial LEI.

What is commercial legal expenses insurance?

Commercial Legal Expenses Insurance (LEI) exists to assist policyholders in obtaining legal advice and assistance in commercial law cases. It covers the costs of any unforeseen legal expenses for parties who are involved in a dispute or those wishing to initiate a legal case. This type of insurance is typically taken out as After the Event insurance (ATE insurance) or Before the Event insurance (BTE).

There is a cost associated with legal expenses insurance, which is usually paid upfront. In certain situations, the payment of the insurance premium can be deferred until the conclusion of the case. This will mean that the client may only pay for it from the funds received if the case is successful.

What does commercial legal expenses insurance cover?

Commercial Legal Expenses Insurance (LEI) is designed to provide coverage for the legal expenses that a business might incur in the course of its operations. It can be used on most types of business disputes, such as employment disputes, employment tribunals or commercial contract disputes. Some of the key coverage areas of LEI include: 

• Legal advice: LEI allows clients to access expert legal advice on a variety of legal issues such as partnership disputes, contract negotiations, and regulatory compliance. With an insurance policy in place, parties should not need to worry about accumulating solicitor’s costs.
• Legal costs and disbursements: Legal expenses insurance covers legal costs and disbursements associated with pursuing a case, including court fees, solicitors’ fees, expert witness fees and other related expenses. It also provides cover for legal representation should your case proceed to court.
• Opponent’s costs: LEI provides protection against the financial exposure of having to pay the opponent’s legal fees in the event that the policyholder is unsuccessful in their legal proceedings.

It’s important to note that the specific coverage of a commercial LEI policy may vary depending on the provider and the terms of the policy. Therefore, you should speak to your insurance adviser in order to determine which policy is correct for your case.

What are the benefits of using commercial legal expenses insurance?

Commercial LEI provides a number of benefits to parties looking to pursue a legal action, including:  

• Claims can be pursued to their fullest extent as businesses do not have to be concerned about the repercussions due to risk mitigation. 
• In the event of a claim, it removes the risk of being made to pay any unexpected legal costs from an opponent if the dispute is unsuccessful. 
• It can provide protection from interim costs orders. Also, depending on the policy, business legal expenses insurance may protect against adverse costs in interim hearings. 
• The existence of a commercial legal expenses insurance policy provides the incentive for an opponent to settle. This is because they know that the insurer has conducted an analysis of the merits of the case and its prospects of success.

Who can Annecto Legal assist?

Whilst commercial LEI is mostly used for claimants, any party to litigation is able to obtain it. An After the Event (ATE) policy can be purchased at any time before proceedings have been issued or any time after. However, purchasing after can result in higher premiums and can increase the difficulty in finding cover.

Commercial LEI allows clients of limited means who may not have been able to pay the amount in dispute previously the opportunity to do so. Annecto Legal prides itself on offering an experienced, professional service at market leading rates to clients who are looking to obtain this legal expenses cover, specifically in the form of ATE insurance.

Small businesses that may struggle to cover adverse costs, or a security for costs order may require after the event insurance. This will enable them to take on a more resourced opponent on level terms.

Annecto Legal assists both large corporates and small businesses with commercial legal expenses insurance to enable access to justice as well as the transfer of financial risk away from businesses’ balance sheets. We can also assist individuals with business disputes, as well as accountants, insurance brokers, solicitors and insolvency practitioners. 

How can Annecto Legal assist?

Annecto Legal helps clients realise the value of their commercial litigation claims. The quotation, application, costs and premium structures of commercial legal expenses insurance can be complex for those without experience. Therefore, we recommend that you get in touch with our team as soon as possible so that we can begin to give you the guidance that you require.

Contact an expert member of our team today to find out more about commercial legal expenses insurance and which commercial insurance product is the correct litigation funding choice for you. Annecto Legal is registered in England and Wales.

To discuss your case further with one of our team, get in touch today.