Commercial Legal Expenses Insurance can cover the legal costs of certain specified disputes and proceedings affecting a business. The exact cover depends on the policy wording and the sections selected.

Common areas of cover can include:

• Employment disputes.
• Commercial contract disputes.
• Property or tenancy disputes.
• ATO tax investigations or disputes.
• Statutory licence matters.
• Certain regulatory or criminal prosecutions.
• Data protection or privacy disputes.
• Enforcement of certain restrictive covenants involving employees or former employees.

Some policies may also provide access to a legal advice service or other legal support.

What legal costs can be insured? #

Depending on the policy, insured costs can include expenses such as:

• Solicitor or legal representative fees.
• Court or tribunal costs.
• Expert witness costs.
• Certain costs awarded against the insured.
• Other approved legal expenses incurred in pursuing or defending an insured matter.

The insurer will usually require the matter to fall within an insured section of the policy and may need to approve legal representation and costs before they are incurred.

Can the policy cover both pursuing and defending disputes? #

It can, depending on the relevant section.

For example, a policy may cover a business defending an employment claim, while another section may cover the business pursuing a contractual dispute or an employee for breach of a restrictive covenant.

This is one of the main differences between Commercial Legal Expenses Insurance and policies that are primarily designed to defend liability claims made against the insured.

What conditions can apply? #

Cover may depend on matters such as:

• The dispute first arising during the relevant period of insurance.
• The business not being aware of the dispute or circumstances before cover commenced.
• The claim satisfying any reasonable-prospects requirement in the policy.
• The insurer approving the legal action and associated costs.
• The policy limit, excess and any applicable sublimits.

The policy wording should always be checked before incurring significant legal costs.

Contact Webber Insurance if you would like help reviewing the scope of a Commercial Legal Expenses policy.