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Why Every Business Owner Should Consider Commercial Legal Protection Insurance

If you were to run into unexpected legal troubles, would your existing insurance policies equip you with the legal assistance you need?

As a business owner, it only makes sense that you want to plan for the future to minimise risks. But, there’s only so much you can plan for – and the unexpected isn’t one of them. 

What would happen if you were to run into unexpected legal troubles that weren’t already covered by your existing insurance policies? Would you have access to expert legal advice? How would you cover the legal fees? 

This is where Commercial Legal Protection Insurance steps in.

What is Commercial Legal Protection Insurance? 

Commercial Legal Protection Insurance was designed to complement a business’s existing commercial insurance policies (as opposed to replacing core insurance coverage) to provide expert legal advice and assistance to SME business owners when they need it the most. 

What are the Benefits of Commercial Legal Protection Insurance? 

  • Policyholders are provided with access to a free Legal Advice Service managed by one of Australia’s most prominent legal firms.
  • Policyholders receive targeted advice from expert lawyers relating to any problem that directly relates to a client’s core business activities.
  • There is no limit on the number of times legal advice can be obtained throughout the duration of the policy period. 
  • Policyholders are protected against crippling costs, regardless of any fault on the client’s part. 

Are Legal Disputes Covered Under Commercial Legal Protection Insurance?

Disputes must fall within one of the following areas: 

Contractual Disputes regarding supply of goods and or services 

This covers the insured for their own legal costs and any legal costs that may be awarded against them when: 

  • Defending a claim against them 
  • Pursuing a customer or supplier (over breach of a term in a written commercial contract)

Tax Audits 

A tax audit will pay for the accountant of the insured to respond to an ATO audit. In the event that the audit escalates into a dispute, the insured can choose to extend their policy to cover a specialist lawyer to represent them for any arising proceedings that may arise. This will also cover a claim from the ATO where any additional GST, Income Tax or Fringe Benefits are due. 

Statutory License Protection 

Statutory License Protection indemnifies the insured for any costs that may be incurred as a result of seeking to protect their rights under a Statutory License which may be under threat of suspension, amendment, revocation, or have a material impact on their ability to conduct their business. 

Landlord Disputes 

Many SMEs choose to rent their business premises from commercial landlords for flexibility and associated costs. However, disputes can often arise between the landlord and the tenant over the terms of their lease, and alleged breaches. This policy provides the insured with a lawyer to pursue claims against their landlord, or to defend themselves – should they be accused of a breach in the lease. 

Claim example: An SME business premises experiences a serious leak that renders the property as unusable, however the landlord refuses to pay for repairs as they claimed it was the client’s obligation. The client then made a claim under this policy to negotiate a resolution with the landlord through a lawyer. The lawyer progressed the matter to court and the judge found that the repair was the sole responsibility of the landlord. The policy covered the cost of any legal fees the client incurred. 

Restrictive Covenant Pursuit 

When an employee leaves an SME, it is imperative that they take no information over to their new employer. Bringing their customer base and intellectual property over to a new employer can put their previous employer at a disadvantage. Where there is a restrictive covenant written into an employment contract, this policy will cover the employers for any legal assistance needed to mitigate the damage caused. 

Third Party Damage to Goods or Premises 

In the event that a former employee or contractor takes property without explicit consent, or damages the premises or property, this policy allows the former employer to pursue the offender. 

Debt Recovery 

This cover provides assistance for the insured to exert pressure in recovering any sums due, and taking matters to court if this fails to bring the desired outcome. 

Who Should Consider Commercial Legal Protection Insurance? 

Commercial Legal Protection Insurance is a great option for SMEs who don’t have in-house legal counsel or lawyers on retainers. While Commercial Legal Protection caters to a range of different industries and professions, it’s important to note that it doesn’t insure lawyers.

If you’re considering whether Commercial Legal Protection Insurance is the right option for you and your business, we recommend getting in touch with our expert General Insurance advisors for an obligation-free insurance review. As your dedicated insurance brokers, our advisors will be with you every step of the way – from finding the right policy for you, providing quotes, and helping you through the claims process, if you ever need it. 

For any questions or concerns relating to Commercial Legal Protection Insurance, get in contact with our Melbourne-based General Insurance team for a free consultation.

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