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What Is Legal Expenses Insurance?

If you lose your case against your employer you may have to pay your employer’s legal costs as well as your own. You can take out legal insurance to cover certain legal costs. There are two types of legal expenses insurance.

• Before the event (BTE) insurance, and
• After the event (ATE) insurance

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BTE Insurance

BTE insurance is what you have as part of your home or car insurance so check your policy. BTE insurance insures against the risk of potential future legal costs and liabilities; it is taken out before an actionable event has occurred. When taken out, BTE insurance is often purchased as an add-on to existing insurance policies (usually motor or home insurance) although it is available as a stand-alone product.

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ATE Insurance

ATE insurance is designed to pay things like costs to your employer in case you lose, disbursements (the claims management companies or lawyer’s out of pocket expenses). It is taken out after the actionable event has occurred. ATE insurers undertake to pay your employers costs in case you lose the case. If you win your claim, the ATE Insurance will not be used.  Claims managements companies will usually set you up with a loan for the cost of the insurance.

For ATE insurance taken out before 1 April 2013, the insurance premium would be paid by the employer. After 1^st April 2013, ATE insurance can only be used to claim back the cost of clinical negligence expert reports.