Legal Cover – The cover explained

It is highly likely that over the course of obtaining insurance quotes, whether it’s for your home, car, or business, that you have been offered legal cover. Considering how it is one of the most talked-about optional extras you can get in the world of insurance, there is a lot of confusion over what the policy would – and wouldn’t – cover. That’s why we wanted to spend some time explaining the different kinds of cover and the protection they offer.

NB – Actual cover may differ from provider to provider. Much of the information below relates to the product we offer, via our partner DAS. For specific information on your policy, please check your policy documents or liaise with your insurance provider.

Commercial Legal Protection

Commercial legal cover, or protection, can cover many businesses from firms selling services (an insurance broker, for example), to those which offer a physical product. The level of cover, and the associated premium, will often depend on the size of the business, which would be based on their turnover.

The cover provided for can include:

Employment disputes – This usually relates to covering you for proceedings against dismissal of an employee, disputes with employment contracts, or defending your legal rights with regards to disputes with employees (or prospective employees, ex-employees, etc.) from alleged breaches of their statutory rights under employment law.

Compensation Awards – It is common under CLP policies that if a case for the above is lost, then the costs of the compensation is met by the legal cover provider. It is likely terms will apply to this, such as conforming to a Code of Disciplinary and Grievance Procedures, however this can be discussed with your representative at the time.

Employee civil legal defence – CLP should also include a section covering the defence of your employees for legal action taken against them, in certain circumstances. Terms attached to this extension are likely to include that the employee was acting correctly, in accordance with the company procedures/policies.

Service Occupancy – Legal protection can negotiate your legal rights against an employee, or ex-employee, to recover possession of premises belonging to you/the business, or for premises which you are legally responsible.

Legal Defence – This covers a multitude of elements in itself, including:

  • Defending your, or your employees’, legal rights when dealing with Health & Safety authorities, or if it is alleged that you or your employees have committed a criminal offence arising from the activities of the business.
  • Defending actions against you/the business/your employees under section 13 of the Data Protection Act 1998; often this will include the payment of any compensation awards made against you.
  • Defending civil action taken against you for wrongful arrest, in respect of theft.
  • Attendance expenses of your employees for jury service.

Contract Disputes – Protecting your legal rights in a contractual dispute arising from agreements/alleged agreements, entered into by yourself/the business, for the purchase, hire or sale of goods or services.

Property Protection and Personal Injury – Enforcing your legal rights in a civil action following an event causing physical damage to material property which you own, or are legally responsible for, and also pursuing your employees’ (or their family members’) legal rights following their death or bodily harm.

Tax Protection – Negotiating on your behalf following proceedings or disputes with HM Revenue & Customs.

A guide to commercial legal expenses insurance from DAS on Vimeo.

Motor Legal Protection 

Motor Legal Protection, or Uninsured Loss Recovery as it is sometimes called, will run alongside your standard motor insurance and essentially fills some of the gaps that the main insurance cannot cover. One of the main myths around this is that you cannot claim costs from a ‘fault’ third party insurer without legal cover. This is incorrect; a claim can be made, it’s just you would either need to do the work yourself, or hire a law firm to do this for you. If you go down the latter route, there is every chance at least a portion of their costs will be deducted from any settlement you receive. By taking out motor legal protection you effectively get a law firm on a ‘retainer’ basis, to act for you when needed. Another added bonus is by having a law firm acting for you, you may end up with more compensation than if you represented yourself – after all, these firms are the experts!

Elements of the cover provided are likely to include:

Personal Injury cover – One of the simplest parts of the cover; if you are involved in a motor incident where an insured third party is at fault, your legal protection can claim your compensation for you.

Recovery of Uninsured Losses – As above, the legal cover can help you reclaim costs such as medical bills, cost of alternative transport, and cost of accommodation (if you are on a trip away, and have to unexpectedly stay at a hotel whilst your vehicle is being put back on the road). Replacement vehicle hire can also be reclaimed from a third party insurer. Also, if the claim is initially dealt with by your insurers and you have to pay your excesses, legal cover can claim these back for you from the third party insurers.

Defending against motor prosecution – The legal protection cover can provide representation for you to protect against prosecution following motoring offenses.

Contract Disputes – If, for example, you purchase a vehicle which then turns out to be in a poorer condition to what you were led to believe, the legal cover can assist in reclaim all or part of your loss.

One of the important things to note with motor legal cover is that there needs to be a third party at fault for the incident (for claims involving motor incidents), and they need to be traceable and insured. Otherwise the claim will have to be covered by your own policy (if you are comprehensively covered), and you cannot claim from yourself for the uninsured losses. Also motor legal protection can only be used for issues involving your vehicle.

A guide to motor legal expenses insurance from DAS on Vimeo.

Home Legal Cover

Home legal cover offers a comprehensive legal policy, which not only covers yourself, but also usually covers your family. This covers a range of eventualities, with the main exclusion being motor incidents, as these are covered by a motor legal protection policy.

The cover provided typically includes:

Employment disputes – A range of instances where you may require legal representation are covered, including if you wish to be compensated following alleged unfair dismissal.

Property Protection – If your property is damaged by a third party and you wish to claim from them (for these cases, depending on the circumstances, it is likely that the third party needs to be insured for this course of action).

Tax Protection – Negotiating on your behalf following proceedings or disputes with HM Revenue & Customs.

Employees’ Legal Defence – If you require legal representation following an incident occurring as a result of your actions in the course of your work/employment.

Jury Service – If you need to serve a trial that lasts several weeks, and need to recover lost salary and other costs.

Personal Injury – If injury forces you to miss work etc., you can reclaim losses and claim compensation.

Identity Theft – Can help reclaim your losses if you are the victim of identity theft.

Contract Disputes – Protecting your legal rights in a contractual dispute arising from agreements/alleged agreements entered into by yourself for the purchase, hire or sale of goods or services.

Clinical Negligence – If surgical or clinical negligence causes your bodily injury or death, you (or your family) can claim compensation.

A Guide to Family Legal Expenses Insurance from DAS on Vimeo.

Some insurance providers will include legal cover as standard, so always check with your broker/provider to ensure the cover is needed before taking out a separate policy/optional extra for it.

With all 3 kinds of legal policy, it is very common for providers to offer other ‘perks’ to cover, such as a legal advice helpline (either a service manned during particular hours, or as a 24/7 service) or will-writing service (for home legal protection).

As mentioned above, all providers will offer slightly differing cover aspects, and will have terms and conditions attached, so please liaise with your provider prior to starting legal proceedings etc. to discuss your case and how they can help.

As ever, we are on hand to assist wherever possible; call the office on 01303 221188 for more information.