Legal Expenses Insurance for Residential Management Companies
Why you need Legal Expenses Cover
Legal expenses insurance can help fund unexpected legal disputes with contractors, neighbours and employees. RMC budgets are always tightly managed
and there may be little scope to fund unexpected events such as legal disputes with contractors, neighbours or employees.
Then there are the hidden costs that are often forgotten, such as the disruption to daily life if you have to seek legal advice or attend court. Failure to act quickly can prejudice your position and result in you losing a dispute by default, which can also be the case if you can’t afford to pay for legal costs yourself.
If you have legal expenses insurance* in place, this need not be the case. It also provides 24/7 legal advice, so you can request information at a time that is convenient for you. And if the dispute escalates it may pay the legal costs too.
Where funds are limited, how will you pay for legal advice or defend an unexpected dispute with your neighbours, a supplier or even an employee?
Then there are costs that are often forgotten, such as the stress and disruption to your life if you have to seek legal advice and attend court. Failure to act quickly could prejudice your position and result in you losing a dispute by default, or being out-gunned by someone with deeper pockets.
If you have legal expenses insurance in place, designed for Residential Management Companies, this need not be the case. It also provides 24/7 legal advice, so you can request information at a time that is convenient for you. And if the dispute escalates in many cases it will meet the legal costs too.
Key features of our Legal Expenses Policy
The policy will provide you with the following*:
- Legal advice
24 hours legal helpline for any matter relating to your block or association. Tax advice is also available 9-5 Monday to Friday. You can seek advice as many times as you need throughout
the policy period. - Insurance for legal costs
Legal defence costs you incur with the insurer’s consent in respect of:
– Disputes with past, present and even prospective employees arising from a contract or statutory employment rights – including awards made against you.
– Investigations relating to Tax by HMRC, either on what is known as a formal aspect enquiry or a full enquiry.
– Disputes with neighbours regarding events such as nuisance or trespass, or activities that could or have caused damage to your property.
– Contract disputes with suppliers or debt recovery actions (over £200).
– Disputes with various regulatory bodies on such things as HSE issues, licences, data protection and criminal prosecutions.
Examples of circumstances where this policy could help you:
- A contractor makes a poor job of some roofing maintenance, and refuses to remedy the problems. You can use this service to engage a solicitor to pursue them to complete the job to the required
standards and seek compensation if appropriate. - Your gardener starts to become unreliable and the work is sub-standard. You need to replace him. Under the policy you can seek legal advice on how to go about it, if there is an unfair dismissal claim your costs of representation in court are covered and, if you lose, compensation awarded will be covered too.
- A neighbouring commercial operation expands and causes a public nuisance impairing your legal rights. You can seek advice on the remedies available to you, appoint a solicitor to act if you have a case and pursue through the courts for resolution. Often the mere fact that you have legal support and the funds to pursue the case will lead to sensible negotiations and resolution.
For a copy of our guide to legal expenses insurance, the cover the policy* provides and examples of how the cover could benefit you, click here.
* For full terms and conditions please refer to the policy wording available on request. Change to read: A broad range of protection is provided to you, including advice at a time that is convenient to you and insurance against legal costs to pursue cases where necessary. As with all insurance policies, the policy is subject to limits, conditions and exclusions. For more information please contact us to discuss further, or request a full summary of the cover or the full policy terms and conditions. For this type of insurance it is particularly important to note that legal advice and the insurer’s consent to costs must be sought as soon as you identify a possible problem and before you incur any costs, failure to do so will invalidate a claim.
Frequently Asked Questions
Do you need legal expenses cover?
It’s not a legal requirement to have legal expenses insurance but in what can be a complex legal environment it can be very helpful to have this cover. It can provide you with cover for the costs of pursuing legal disputes against neighbouring property or with disputes with contractors. Importantly it should also give you access to a legal helpline that can provide advice on legal issues affecting the block. This could save costly solicitors’ fees and the inconvenience of arranging and attending appointments. Policies differ on what legal disputes are covered so you should ensure that you read carefully the various options available to you.
Does home insurance cover legal costs?
Legal expenses insurance is standard with many home insurance policies but if you’re a leaseholder living in a flat you need to check if it comes as standard with your buildings insurance cover. Please note the policy arranged for the block may not necessarily cover some of the potential legal issues you have personally as an occupier. It is generally for block issues only, so you should check the cover on your home insurance.
What does legal expenses insurance mean?
It is an insurance product that can be taken out by businesses, including a Right to Manage Company (RTM) or Residents Management Company (RMC), or individuals to cover legal costs associated with legal proceedings that may be brought against you or that you may want to bring against someone else. Policies vary widely (as does the cost) so you should ensure that you review the various options available.
Are legal and professional fees tax deductible?
This largely depends on your status as different rules often apply, you can check with a qualified accountant. If you don’t have an accountant you can get advice from the Government (links to https://www.gov.uk/business-support-helpline). Call 0300 456 3565 or email enquiries@businesssupporthelpline.org.uk
If you can’t find an answer above please email your question to us at UKinfo@ajg.co.uk