Broker Training – Commercial Legal Expenses
Commercial Legal Sales Process
The Lexelle Commercial Legal Expenses may be offered either standalone or as an optional additional cover to a Businesses main Professional Indemnity insurance policy and offers cover for a range of common potential business legal issues that can arise.
It is important to run though the following key product features, covers, special restrictions and some important areas that would not be covered by the policy as a minimum set of declarations prior to the sale of the policy.
Commercial Legal Summary of Key Covers
For all policy sections the maximum amount payable in respect of any one claim is £50,000. The maximum amount payable for all Claims notified during the annual period of insurance is £500,000. (Note: other specific limits apply to various sections of the policy as detailed in the various policy cover sections summarised below).
Free Legal Advice Telephone Helpline service for legal issues falling under the jurisdiction of the courts of England, Scotland, Wales and Northern Ireland.
Cover for legal costs to defend the company policyholder’s legal rights;
(a) in resolution of unfair dismissal or redundancy disputes including those falling under the ACAS Arbitration Scheme
(b) in disputes relating to an employee or former employee’s contract of employment and
(c) following an alleged breach of an employee, prospective employee or former employee’s statutory rights under employment law.
The policy will cover any compensation award in respect of any claim that has been accepted under the Employment Disputes section detailed above. Claims will be settled on the condition that throughout a dispute the company policyholder has followed either
(a) ACAS Code of Disciplinary and Grievance Procedures or
(b) followed equivalent Labour Relations Agency codes of practise in Northern Ireland or
(c) sought and followed advice of the policy Claims Department.
This section of cover will provide legal assistance to recover the company policyholder’s premises that either they own or are responsible for and which are currently vacated by an employee or former employee.
The policy will provide cover at the company policyholder’s request to defend the legal rights of directors, partners, managers and employees of the company;
(a) prior to issue of legal proceedings when dealing with the Police or Health & Safety Executive
(b) following an event leading to prosecution in court
(c) following civil action related to a breach of GDPR or
(d) an event arising from their work as an employee leads to civil action against them under grounds of sex, sexual orientation, race, disability, age or religious belief or political opinion or
(e) civil action is taken against them by the trustees of the company pension fund.
This also covers legal defence of the company policyholder’s legal rights;
(a) following civil action taken against them for wrongful arrest in respect of an alleged theft and
(b) following an appeal Information Commissioner’s refusal to register the company’s application for ICO registration
Covers legal costs for negotiation of the company policyholder’s legal rights in a civil action relating to material property which is owned by them or is the responsibility of them following an event which causes physical damage to such material property including any nuisance or trespass. Cover is only provided on the basis that the company policyholder will suffer financial loss if the fail to pursue or defend a dispute or legal proceedings.
Covers for negotiation on behalf of the company policyholder in any dealings with HMRC for the following
(a) Full HMRC Tax Enquiry, Aspect Enquiry or Tax Intervention Enquiry and any appeal proceedings
(b) disputes related to PAYE or Social Security regulations following a review by HMRC and
(c) appeal proceedings following a HMRC VAT assessment.
Covers legal costs for negotiation of the policyholder’s legal rights in a contract dispute, where the amount in dispute is more than £1,000 arising from an agreement, which the policyholder has entered for the purchase, hire, sale or provision of goods or services.
For all claims the debt must exceed £250 and the company must have exhausted all reasonable credit control and accounting procedures.
Covers legal costs for negotiation of the Policyholder’s legal rights in respect of a former employee who acts in breach of their employment restrictive covenants.
Covers legal costs for negotiation of the Policyholder’s legal rights in respect of an appeal against a statutory licencing authority act or omission to alter or refuse to renew a statutory licence.
Covers legal costs for negotiation of the Policyholder’s legal rights in respect of a dispute with the landlord over premises leased or rented by the Policyholder.
Commercial Legal Summary of Key Exclusions
It is important to ensure that the policyholder is made aware of the following key policy conditions and exclusions prior to purchase of this policy. These are the key exclusions, a full list of all exclusions that apply are detailed in the relevant cover section within the main policy terms and conditions that must be issued to the policyholder together with a policy schedule at point of sale.
The Legal Advice Helpline is not to be used as an alternative to making a claim under the policy and offers general telephone advice only.
- Any dispute that arises within the first 90 days of the first annual period of insurance
- Any dispute with an employee who was subject to a formal or informal written or oral warning within 180 days
- Any redundancy dispute arising within the first annual period of insurance
- Where the company policyholder has not followed advice given by the Claims Department prior to carrying out any disciplinary procedure, dismissal or implementing a redundancy programme or making an employee redundant.
- Where the company policyholder has not followed advice given by the Claims Department where
(a) an employee leaves without or with written notice
(b) an employee has made a formal or informal notice of grievance
(c) an employee makes a formal or informal complaint of sexual, racial, religious, disability, age or of sexual orientation discrimination nature.
Any compensation award that is related to;
- Trade Union activities or membership
- Employee Maternity rights
- Health & Safety related dismissals
- Any award ordered by a tribunal for failure to comply with a recommendation it has made
This cover is restricted to the legal defence of a counter-claim only.
Excludes any claim related to prosecutions for any infringement of Road Traffic laws or regulations in connection with the ownership, driving or use of a motor vehicle.
Excludes the following;
(a) boundary disputes
(b) tenancy or rent reviews
(c) a motor vehicle owned, hired or leased to directors, partners, managers or employees of the company other than damage to motor vehicles where the policyholder is engaged in the business of selling motor vehicles
(d) any property that is not related to the company policyholder’s business.
Any claim related to;
- Any injury that is not related to a specific or sudden event
- Defence of an insured person legal rights other than defence of a counter claim
- A motor vehicle owned, hired or leased to directors, partners, managers or employees of the company.
Any event or dispute related to :-
- Enquiries or appeals that commenced prior to inception of the policy
- A tax avoidance scheme
- Failure of policyholder to register for VAT
- An investigation by Customs Special Investigations Section
- Enquiries where the policyholder has intended to deceive HMRC with false statements
- Late submission of tax returns within the statutory time limits.
- Settlement payable under an insurance policy
- Financial products including mortgage, loan or pension
- A motor vehicle owned, hired or leased to directors, partners, managers or employees of the company unless the main business concern is the sales, hire or lease of motor vehicles
- Sales or provision of computer hardware, software or systems
- Contracts of employment.
- A debt related to an agreement prior to the inception of the policy if the debt arises within the first 90 days of the policy
- Settlement payable under an insurance policy
- Financial products including mortgage, loan or pension
- A motor vehicle owned, hired or leased to directors, partners, managers or employees of the company unless the main business concern is the sales, hire or lease of motor vehicles
- Sales or provision of computer hardware, software or systems
The restrictive covenant(s) are incorporated into the employee’s written contract of employment.
Any claim relating to the ownership, driving of or use of a motor vehicle.
- A Dispute arising from rent or service charges.
- The negotiation or renewal of the lease or tenancy agreement.
Commercial Legal Policy Conditions and General Exclusions
- All claims must be reported as soon as possible and in any event within 180 days of the event giving rise to the claim.
- For all legal claims there must be a reasonable prospect of success, i.e. more than 51% chance, that a claim will succeed and the claimant will be able and likely to obtain the compensation or none financial result that they are seeking.
- Any legal or associated costs that the policyholder has incurred prior to reporting the claim are not covered.
- All claims for any matter that was not caused by a specific or sudden incident/event are excluded.
- Any claims that arise from a criminal act or omission are excluded.
- Any claim for incidents that occurred outside United Kingdom & Northern Ireland are not covered as are any claims that occurred outside the period of cover detailed on the policyholder’s policy schedule.
FAQ’s
The policy is designed to cover companies against the cost of taking legal action or defending their rights if a legal dispute should arise with another party.
The policy covers for more than one claim but there is an indemnity limit for any one claim of £50,000 and for all claims during an annual policy period of £500,000. These are the main policy limits.
The Legal Helpline service will offer advice on legal matters that fall under the jurisdiction of the courts of England, Scotland, Wales and N.Ireland.
The service is will provide generic legal advice over the telephone and no formal correspondence will be entered into. Policyholders must not use the helpline as an alternative to making a claim on the policy.
There are no set limits for use of the helpline, however, this service can be withdrawn if a policyholder’s use of the helpline is deemed to have been excessive and therefore unreasonable.
Yes, normally we would appoint a legal representative to act on the policyholder’s (company’s) behalf. However, the policy permits a policyholder to choose their own representative subject to the stipulated policy terms and conditions and this must first be approved in writing prior to proceeding.
Any disputes that have occurred before inception of the policy are excluded from cover.
In summary, for all civil claims the appointed legal representative (solicitor) must first determine that there is more than a 51% chance of success in order for the claim to proceed as it is not beneficial for anyone concerned to progress a legal claim that has less than a 51% chance of success.
Unfortunately, each separate business would need its own policy.