Legal claims can be very expensive for any business. Chris Ward says commercial legal protection insurance is now a must-have commodity
Is legal protection for business a luxury purchase? The simple answer is, not any more. With a legal claim more likely than a fire claim, commercial legal protection insurance is something that all businesses should be advised about.
The legal risks a business faces are numerous and to make matters more complicated, these risks alter as the law changes.
The changing nature of these exposures means efficient access to appropriately qualified advice as well as insurance cover should be a priority. How else are affected businesses going to be aware of the law?
Ignorance of the law is no defence.
Every business will face some or all of the following risks each requiring the services of professional lawyers or advisers to resolve or avoid a problem:
The insurance sector has for years spoken about the need for and stressed the benefits of risk management.
Whisper it quietly, but are we just paying lip service to this in most instances? Most of the time prevention really is better than the cure.
Take the scenario of a business being faced with an employment tribunal action from a disgruntled ex-employee.
With legal costs escalating and the level of compensatory awards in employment tribunals inexorably on the rise, today's business can no longer afford to ignore the costs that will hit their bottom line.
But it's not only the physical cash cost that impacts, it's the management time taken out of the business to deal with the dispute.
For example, take a business which is taken to the tribunal by an ex-employee.
With the grievance procedure, appeals, witness statements and the tribunal hearing itself, it is quite conceivable that three senior managers would be taken out of the business for the best part of 20 working days.
The fact that the case may have had little merit in the first place and that the towel could be thrown in by the ex-employee half way through the tribunal hearing would be no real consolation.
It leaves a somewhat pyrrhic victory. What business opportunities were missed because three senior managers were diverted from their core tasks?
Good professional advisers can cost significant sums of money, with solicitors charging hourly rates ranging from £150 to £250.
Commercial legal expenses insurance, with the provision of good commercial advice and insurance of legal costs in the event of a dispute, is a cost effective and realistic solution for business clients. They should have the following features and benefits: .
Working for business
Commercial legal expenses insurance products that work not only for the business but also for the distributor are available and should, from the distributors perspective:
Commercial legal expenses insurance is no longer a luxury purchase, it is more a necessity - just like any traditional insurance purchase. IT
' Chris Ward is the managing director of Abbey Legal Protection.