There are two main types of legal expenses insurance available in the UK: Before and after the event (BTE and ATE).
Before The Event Insurance
This is a policy which is in place before the dispute begins. Most businesses will want BTE legal expenses insurance as there is a high chance of them becoming involved in legal proceedings at some point. Before the event insurance is included in many types of business insurance package as well as home and car insurance.
After The Event Insurance
This is a policy which is taken out after the accident or dispute which is resulting in legal proceedings has occurred. In most cases a solicitor or law firm you are working with will require you take out this insurance before they proceed with your case, so that expenses will be covered in the event of the claim being unsuccessful.
The most common types of claim handled by either type of legal expenses insurance are car accidents, recovery of uninsured losses, consumer disputes and minor injuries.The types of dispute covered will be outlined in the policy's terms and conditions, as well as the maximum payout which is usually either £50000 or £100000.
Pursuing legal action without the cover of a comprehensive legal expenses insurance policy is not usually advisable; even if you have a strong case there is still chance you could lose and end up having to pay substantial compensation as well as the other side's legal costs.
The biggest limitation of legal expenses insurance, particularly with before the event cover, is that it will be up to the insurance company whether to cover your proceedings or not, they will have to be convinced that you have at least a 50% chance of success in the case and may require you to work with a solicitor who they are affiliated with.For this reason it's important that you speak to your insurer about your intention to claim before you seek any legal advice for which you may be charged, or to ask the solicitor you speak to about legal expenses insurance if you don't have a BTE policy in place.