Legal Expenses Insurance

As well as being provided on a stand-alone basis, legal expenses insurance is commonly included in motor policies, and increasingly in household policies. When it is sold as part of another policy rather than as a stand-alone product, it is often presented as a free or low cost addition.

Typically, cover is provided for the legal expenses that the policyholder may incur in most personal injury, consumer, property and employment disputes, as well as for any award of the other party’s legal costs.

Normally, there is a requirement that if a policyholder makes a claim for legal expenses, any legal action for which the expenses are incurred must have a reasonable prospect of success. The policyholder is also usually required to accept any reasonable offer of settlement.

When a policyholder puts in a claim under a policy of this type, most insurers will assess the dispute in-house (or perhaps with the assistance of one of their panel of solicitors), and will then determine whether there is an arguable case. If the insurer concludes that the case has little prospect of success, it may simply notify the policyholder that it is not prepared to accept the claim.

Where the case appears more complex, or seems to have a good chance of succeeding, insurers usually appoint one of their panel of solicitors to consider the matter. These panels are set up by insurers to deal with cases on commercial terms that are agreed in advance. The terms may be agreed on a ‘no fee’ basis (where the solicitors expect to cover their costs through the costs awarded against other parties, if their client is successful) or on the basis of a set fee per case. Usually, only in exceptional circumstances will the insurer appoint a solicitor not on its panel.

Most cases handled under legal expenses insurance involve:

• car accidents;
• the recovery of uninsured losses from third parties;
• damages for minor injuries; and
• small consumer disputes.

However, legal expenses insurance can cover a wide spectrum of other disputes, from medical negligence to property disputes.

For further information or a quotation call Quadris Insurance Brokers on:
01483 756 800 or email us insure@quadris.co.uk