What Is Legal Expense Insurance?
What Is Legal Expense Insurance?: Legal expense insurance is also known as LEI or Legal Protection Insurance. The main purpose of investing in such an insurance is to gain easy and timely access to legal advice. This insurance also covers any legal costs incurred as a result of any dispute. Nobody has any inkling about the future and it is always better to prepare oneself ahead of time.
Let’s take a brief look at LEI, how it works and its benefits.
How LEI Works
As mentioned before, LEI basically covers the entire legal cost in case of any dispute and allows access to legal advice. LEI works two ways:
- There is an ‘After-the-event’ insurance which covers the legal costs when you are already in a dispute. It not only covers your legal cost but also entertains the legal cost of the other side in case you lose.
- There is a ‘Before-the-event’ insurance which is generally sold with another type of insurance. An example is that of a house insurance or a car insurance. Both these insurances come with a ‘before-the event’ LEI insurance.
However, this type of insurance does not cover the cost of any compensation that you are ordered to pay in case you lose. This type of insurance covers the solicitor’s fees, the court fees, witness fees and your opponent’s legal fees.
Keep in mind that this type of insurance is not as benevolent as the ‘After-the-event’ insurance because it’s not necessary that your insurance company will take on your case.
Benefits of Investing in LEI
Whether you run your own business or are an employee, you can never anticipate that you might be needing legal advice. It is generally recommended that you invest in a good legal expense insurance as protection. A few benefits are outlined below.
- If you are running your own business, LEI can save your business from bankruptcy in stressful times. Legal costs can run very high and in the absence of LEI, your business can easily be bankrupt.
- The hassles of a legal action can drain you but with LEI, this hassle is taken care of so you can concentrate on other important things.
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