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What is Legal Expenses Insurance?

What is Legal Expenses Insurance?

what is legal expenses insurance

The legal costs of bringing a claim can be incredibly high in many types of cases, especially commercial litigation. These costs can deter people and business’ from pursuing a claim and standing up for their legal rights. A potential litigant must consider not only their own legal costs but also the potential exposure to the other side’s costs.

A solution to this problem is usually to obtain legal expenses insurance to protect parties from the costs of litigation; but what is legal expenses insurance, and how does it work?

Legal expenses insurance (LEI) cover can help litigants to cover the costs incurred throughout their case, as well as protecting them from adverse costs. LEI provides individuals and businesses with the opportunity to pursue legal action whilst minimising the stress regarding the legal fees associated with it. This insurance is designed to give parties access to expert legal advice and assistance on legal matters, and prevent any uninsured losses.

It is essential to determine whether LEI cover is right for your case, or if an alternative source of funding would be more suitable. It is, therefore, vital to have an experienced insurance adviser on your side to ensure you understand the options available to you. At Annecto Legal, we can assist clients in identifying the finer points and help them to secure the best deal for their case.


What is legal expenses insurance cover?


Legal expenses insurance helps policyholders to obtain specialist legal advice and assistance for legal cases. LEI can also aid with any unexpected legal costs that arise because of legal disputes, or when pursuing a case themselves. LEI can provide protection against the financial exposure of having to pay an opponent’s legal fees in the event that the policyholder is unsuccessful in legal proceedings.

Legal expenses policies can be included as optional additions to certain business policies, life insurance, vehicle insurance and home insurance; these types of policies are known as “before the event” insurance.

If a party does not have an insurance policy in place before an event that gives rise to litigation occurs, they may still obtain legal expenses cover using an “after the event” (ATE) insurance policy.

There is typically an upfront cost for this type of insurance. In some cases, the payment of this insurance premium can be deferred until the conclusion of the case. In these situations, policyholders may only pay for this premium from the awards received if the case is successful.


Benefits of legal expenses insurance cover


Legal expenses insurance provides a variety of benefits to parties wishing to pursue a legal action. Some of these benefits include:


  • Claims can be pursued to their fullest extent as policyholders do not need to be as concerned about the financial repercussions of a legal case due to risk mitigation 
  • LEI takes away the risk of being made to pay the opponent’s legal costs in the event of an unsuccessful case 
  • Legal expenses insurance can provide protection from interim costs orders. Also, certain policies can protect against adverse costs in interim hearings 
  • LEI policies can provide an incentive for an opposing party to settle a case. They will be informed that an insurer has conducted an analysis of the merits of the case and have determined that the case has good prospects of success


Who can Annecto Legal assist?


Whilst legal expenses insurance is predominantly used for claimants, any party to litigation can obtain cover. LEI can be purchased at any time before proceedings have been issued, or following this. Purchasing LEI after proceedings have commenced however typically results in higher premiums and can make it more difficult to find cover.

At Annecto Legal, we take pride in our services relating to litigation insurance. We offer a professional service at market leading rates to clients who are seeking legal insurance cover.

Businesses that find it difficult to cover the costs of an adverse costs order may require ATE insurance to be able to take on a more resourced opponent.

Annecto Legal assists both small business and large corporates with legal expenses insurance to enable access to justice as well as the transfer of financial risk away from businesses’ balance sheets.

We can also assist individuals with business and employment disputes such as unfair dismissal claims.

We work alongside a range of professions including solicitorsinsurance brokersaccountants and insolvency practitioners, providing assistance on litigation cover and funding.  


How can Annecto Legal help?


Annecto Legal helps clients realise the true value of their litigation claims. The quotation, application, costs and premium structures needed to buy legal expenses insurance can be complex for those without experience. Therefore, we recommend that you get in contact with our team today so that we can give the guidance you need.

We provide our legal services to a range of clients. Contact one of our professionals as soon as possible to find out more about LEI and which litigation cover is the right funding choice for your case. Annecto Legal is registered in England and Wales.

Call us today 0800 612 6587, or our director, Mark Beaumont, can be contacted by email

Get in touch

* Annecto Legal can only assist on case where the loss is in excess of £100,000, with the exception of data breach claims. If you need assistance on a claim worth over £100,000, please get in touch using our form or the details below:

Registered Office

Annecto Legal Ltd, 106 Kennedy Building, Murray Street, Manchester , M4 6HS

London Office

71 Central Street, London, EC1V 8AB


0800 612 6587


Contact us directly