Legal Expense Insurance
legal expenses insurance, also known as “LEI” or “legal protection insurance”, is a type of insurance policy which covers policyholders against the potential costs of legal action against an institution or an individual. When something happens which triggers the need for legal action, it is known as ‘the event’. There are two main types of legal expense insurance, Before the Event insurance and After the Event insurance.
Before the Event insurance
Before the Event insurance, also known as “BTE insurance”, is an insurance policy which can be taken out by those wishing to protect themselves against the potential litigation costs, which could be incurred following a future event. These costs often include solicitors’ fees, barristers, expert witnesses, court fees and any legal costs awarded to the other side. Before the Event insurance is generally paid on an annual basis to an insurance company. It is often sold as part of a household or car insurance package. It is also sometimes offered as a benefit to members of a trade union or association.
After the Event insurance
After the Event insurance, also known as ‘ATE insurance’, is insurance which can be taken out after an event, such as an accident which has caused an injury, to insure the policyholder for disbursements, as well as any costs should they lose their case. After the Event insurance is usually used by people who do not have Before the Event insurance. If the claimant loses their case, then the insurance company will pay their opponent’s legal costs and expenses. Solicitors who take on, for example, personal injury cases on a ”no win no fee” basis, may require their clients to take out After the Event insurance so that costs will be covered if the case is lost. This insurance is often offered by solicitors and claims management companies.