Whether you are a one-man band or manage a much larger organisation, being financially prepared for unforeseen legal challenges is an integral aspect of corporate resilience. In this article, we explore the pivotal role of legal expense insurance in protecting businesses from unexpected legal challenges.
What is legal expenses insurance?
Legal expenses insurance (LEI) is used by businesses to ensure that they have access to legal support when they need it. In an increasingly litigious society, the threats to your business of a legal claim are numerous. Employment conflicts, tax disputes, debt recovery, data protection issues, or corporate identity theft—all have the potential to trigger claims that not only strain your company’s financial resources but also consume valuable time.
Legal expenses insurance is a way to financially safeguard your company against unforeseen legal challenges and ensure that they don’t thwart your long-term success.
Under a legal expenses policy, in the case of a claim against your company, the costs and expenses associated with legal representation will be paid by the insurance company. Depending on the terms of the contract you may also have access to additional benefits such as a 24-hour legal helpline and invaluable crisis PR support to protect your reputation.
Who needs legal expenses insurance?
No business is immune to the risk of a legal challenge, which makes a legal expenses insurance policy an essential element of comprehensive risk management for all businesses in Asia.
Whether you are a large, established business or a small start-up, a contractor, freelancer, SME, or professional consultant, this type of insurance will bolster your financial defenses and give you peace of mind that your company could survive financially if faced with an unexpected legal challenge. Legal expenses insurance ensures that you have access to expert legal guidance to navigate potential disputes.
Legal expenses insurance: a case study
Mr L is an experienced management consultant based in Phnom Penh with a growing clientèle throughout Asia. His consultancy firm specialises in business strategy and organisational development. Recognising the need for robust legal protection to safeguard his business interests early on, he took out a legal expenses insurance policy through Infinity when he set up the business.
During a strategic restructuring project for a prominent client, Mr L found himself entangled in a contractual dispute. The client, dissatisfied with the project outcomes, threatened legal action, alleging a breach of contract. Faced with potential legal proceedings and the accompanying financial burden, Mr L contacted his insurer to make a claim. He gained immediate access to experienced legal professionals with expertise in contractual matters and received bespoke advice on how to proceed with the dispute.
The insurance company subsequently provided coverage for the legal costs associated with contract disputes, enabling Mr. L to engage a crack legal team without compromising his firm’s financial stability.
Safe in the knowledge that the financials were taken care of, Mr L was able to concentrate on his consultancy work without diverting excessive time and resources to the legal proceedings.
Thanks to the legal expenses insurance, the dispute was successfully resolved without huge financial cost to the business and Mr L maintained his professional reputation and client relationships.
Protect your company with legal expenses insurance
We recommend that all businesses consider legal expense insurance as part of their risk management strategy. We believe that in terms of cost versus potential risk, it’s an affordable no-brainer that will boost your company’s financial resilience without breaking the bank and give you peace of mind that your long-term success will not be jeopardised by a legal claim against you.
If you’d like to find out how to protect your business with a cost-effective legal expenses insurance policy, why not get in touch? Our knowledgeable advisers can find policies tailored to your needs at the best prices.
Do check out our full range of corporate solutions for businesses in Asia, including international group pensions, group medical insurance, and offshore company formation.
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