Legal liability policies are commercial insurance products that protect assets and finances in the event someone takes legal action against you or your organisation.

Whether for businesses, professionals, or individuals, legal liability insurance helps to cover legal costs, like solicitor fees and other expenses, when defending a claim. It may also cover any damages or settlements awarded in a lawsuit.

Legal liability commercial insurance to protect against a claim

There are several insurance types available in the UK that protect against legal liability, such as:

1. Professional Indemnity insurance: Often purchased by professionals – including lawyers, accountants, consultants, and service-led businesses – like creative agencies, technology companies, and media production houses – Professional Indemnity protects against claims arising from alleged errors or omissions in your work.
2. Employers’ Liability insurance: This type of insurance is legally required in the UK for most businesses with employees. It provides coverage for claims brought by employees who are injured or become ill as a result of your work.
3. Public Liability insurance: With this policy, you’ll gain protection for businesses and individuals against claims from injured members of the public, or those with damaged property because of their actions.
4. Product Liability insurance: This cover provides protection for businesses that manufacture, distribute, or sell products in the event it causes injury or damage.
5. Directors’ and Officers’ Liability insurance: For company directors and officers, it protects against claims brought by shareholders, employees, or other parties as a result of your actions or decisions.

What types of damages does legal liability pay?

As well as paying to defend the legal actions faced, legal liability insurance also covers certain damages.

Generally speaking, legal liability insurance covers payments awarded by a court to compensate the claimant who suffered the initial loss or damage which prompted legal action in the first place.

What types of damages does legal liability not pay?

Legal liability doesn’t usually include damages that are potentially very high amounts or against the insurer’s public policy to pay them. For example, your policy might not pay for:

• Punitive damages
• Fines
• Future profits and enrichment
• Service credits

Need more information?

Every insurance type differs, and finding the right legal liability policy is crucial for your business. To learn more about taking out legal liability insurance, call us on 0161 533 0411, email info@riskboxuk.com, or fill in our online form, and we’ll get back to you.

Photo by Tingey Injury Law Firm on Unsplash