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Is your business covered? Enhanced legal expenses insurance explained

Comprehensive insurance is vital to protect the future of your business. Find out how you can improve your cover with enhanced legal expenses insurance, plus maximise your prospects of success.

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Comprehensive insurance is vital to protect the future of your business, but getting the correct cover is something that many business owners overlook. Find out how you can improve your cover with enhanced legal expenses insurance, plus maximise your prospects of success.

Standard legal expenses insurance (LEI) may not cover all the needs of your business, so you may need to tailor your cover with enhanced legal expenses insurance. Areas of your business that may need added protection include:

Contracts: If you use contracts with your customers or suppliers, you face the possibility of contractual disputes. Without the appropriate legal cover, contesting a dispute can be a very costly and time-consuming business. Enhanced LEI can cover costs incurred in a dispute with a customer or supplier in respect of a contract.

Debt recovery: Late payment and the non-payment of debts are big problems for small business as they inhibit the flow of cash. Enhanced LEI can cover the costs incurred in a dispute with a customer in respect of an uncontested debt that arises from the sale or provision of your goods or services.

Restrictive covenants: If any of your employees have access to your customer database, you need to prevent them from using this information against the interests of the company by soliciting your customers.

You should have a clause in your employment contract to protect your business should they leave. Employees are deemed to have accepted the terms of this clause when they sign the contract and it will bar them from soliciting your customers for up to six months from the date they leave your service. This is known as a restrictive covenant, and it can be enforced with enhanced LEI. The insurance will cover costs incurred in the pursuit of legal proceedings against an employee or former employee who is in breach of restrictions contained within a written contract of employment. If you use the contract of employment from the Forum's templates it has a tried and tested restrictive covenant in it which you will be able to enforce.

If you do not have a restrictive covenant in your employment contracts or you would like to use the Forum's contract, contact our helpline who will be able to help. Members can call us on 01565 626001 for more advice.

Motor disputes Enhanced LEI can cover costs incurred in the pursuit or defence of legal proceedings between you and a customer or supplier in respect of a contract for the sale, purchase, hire, lease, hire purchase, service, repair or test of a motor vehicle which you own. Insolvency It can also cover the fees of an insolvency practitioner acting as an insolvency office holder who has been appointed following the insolvency of yourself where there are insufficient assets to meet such costs. Maximise your prospects As with standard LEI, you can improve the chances of a successful claim by following these basic requirements of most legal expenses schemes:

Take advice It is important that advice is taken from the correct service. LEI schemes will rarely allow you to rely upon third party advice so you have to contact the relevant advice service stipulated in your policy at the first sign of trouble.

Follow advice You may not like the advice you receive but it is given to ensure that you have the best prospect of dealing with your employment issue. It is important to follow the advice and act in a fair and proper manner. Sometimes the advice received may not be what you want to hear but, if you fail to follow it and then act in a manner that contributes to a subsequent employment claim, you may find that the insurers will refuse cover.

Register the claim quickly If you have a claim, it is crucial that you contact the advice service immediately for the claim to be registered. The paperwork is then checked by the insurance claims department that validates the insurance and arrange for an assessment to be undertaken. So, the sooner you register your claim, the sooner it can be resolved.

Members: call us now on 01565 626001 to discuss your insurance needs.

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