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Costly Claims Could Sink a Business: Here’s a Solution

Disputes are, unfortunately, a common part of today’s business landscape. In fact, any business that hasn’t found itself involved in some sort of legal wrangle can probably count itself lucky.

Legal costs and professional fees to defend any claims made against your business or to pursue a disagreement over a contract, for example, mount up very quickly and can run into significant sums: sums that can often have a shattering effect. Have you thought about how you would cope if the prospect of such expenses suddenly became a reality for your business?

In this post we discuss some of the most common disputes that arise in business, and offer a solution to cover the costs attached to defending any action you might face.

Mention business disputes and probably the first thing that springs to mind is employee related issues. We’re living in an age where employees are well aware of their rights, and where ever changing employment law makes it extremely tricky to keep up with where you stand on the latest rules and regulations.

Employers’ Liability Insurance Doesn’t Cover Legal Expenses

If you believe that Employers’ Liability insurance will take care of the legal costs involved in defending an employee claim for something like unfair dismissal or discrimination, or will cover any compensation award you are ordered to pay by an Employment Tribunal, you will find you are sadly mistaken. Employers’ Liability insurance helps you pay compensation if an employee is injured or becomes ill during the course of their work duties, but it won’t cover your legal costs to defend a claim outside of this if you are found liable.

Defending Prosecutions & Investigations

As well as employment related disputes, you may as a business find yourself having to defend actions from a host of other sources. Two of the most common are the Inland Revenue and the Health and Safety Executive (HSE).

If you face a prosecution by the HSE for a failing under the Health & Safety at Work etc. Act 1974 which you wish to defend, the costs of good quality legal representation can be substantial. In the last year, the HSE prosecuted 582 cases and 988 offences across the UK, so it’s easy to see how common such action really is nowadays.

Tax, VAT, PAYE and NIC investigations have also become a regular occurrence of late. In such cases you may need to bring in professionals to represent you through an in-depth investigation. Accountants’, tax advisors’ and auditors’ fees soon add up and if you can’t afford access to such expert help you may find yourself struggling to present your case.

If your business operates under a statutory licence and comes up against an investigation by the local authority or the police, you will need legal representation to get you through any formal interviews, licensing committee hearings or magistrates’ court proceedings. If your licence is in jeopardy then you’ll need strong representation to appeal before the court. Think about how much this might cost you.

The Data Protection Act is another area where you could find yourself in the midst of proceedings should a breach occur. And where property is concerned, there may come a time when you need to pursue legal rights arising from negligent acts of other people, or when you need representation in a dispute with a landlord, perhaps over a tenancy agreement or a lease.

Contract Disputes are Common in Business

If contracts play a part in your business, perhaps because you subcontract out some of your work or you have agreements in place with customers or suppliers covering service levels or individual projects, then you may find yourself facing a dispute or a claim should a contract breach occur.

Contract disputes are particularly common in the construction industry, but realistically can and do occur in any sector. If you find yourself on the receiving end of a claim because you’ve allegedly failed to meet your side of an agreement, or need to take action against an advisor, supplier or contractor who has not fulfilled their duties under a contract, or who you feel has acted negligently, the legal costs will soon mount up.

How to Protect your Business

These are just a few of the issues that can arise in business. If any of them strike a chord with you, you will be relieved to learn there is a way to protect your business against what could be devastating costs.

Commercial legal expenses protection is often sold as an add-on to various business insurance policies. It offers cover for legal costs incurred defending claims or investigations, such as the engagement of solicitors, barristers and expert witnesses.  Usually you’ll also get free access to legal and tax advice helplines so you can call up and talk to a solicitor or other professional about any issues that might be developing.

Some policies also offer a jury service allowance to compensate for the loss of employees attending court. There may also be the option to extend benefits to employees, such as legal expenses cover for staff and partners to pursue compensation following a personal injury.

Disputes are part and parcel of business life. But for an affordable cost you can protect your business against legal and professional fees that could prove crippling. Like to find out more? We can help with tailored advice and policies that specifically suit your business. Get in touch for a chat about your individual requirements.

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