The most popular before-the-event commercial legal protection policy has been criticised because it excludes claims made before the policy is issued.
LFC managing director Jerry Clayton is urging insurer DAS to alter its Commercial Legal Protection policy on the issue of contract disputes.
The exclusion is found on page seven of the policy. The terms state: "Provided that the policyholder has entered into the agreement or alleged agreement during the period of insurance and the amount in dispute exceeds £250."
Clayton said: "As a company, we have decided not to sell DAS Contracts Dispute cover until the wording is altered and I would strongly recommend all brokers and intermediaries to make their clients aware of this proviso."
DAS said it was looking into the complaint but pointed out that the policy has been available for 25 years and has 60% of the market share, according to figures from the Association of British Insurers.
Assistant general manager Tony Buss said: "The DAS Commercial policy wording makes it absolutely clear that the policy covers disputes entered into during the period of insurance.
"In view of the fact that this information is also clearly included in our sales literature, we are surprised that this issue has only come to light once a claim was
initiated."
Buss says brokers should look at any pre-existing circumstances which may need to be disclosed. He added: "All of these issues were given a great deal of consideration when the policy was originally written."
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