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1 in 5 businesses have been involved in a legal dispute in the last 5 years, and almost half were abandoned due to legal costs

Many businesses feel crippled when making decisions relating to their business, and employee related matters. The ramifications of employment law can lead to legal advice or representation becoming costly and time consuming. And while the law is there to, quite rightly, protect all parties sometimes as a commercial operation it’s challenging to weigh up the cost vs what is the right action for your business.

This is where ARAG Business Legal Expense Insurance can offer you the risk management you need.

Examples for how ARAG Legal Expense Insurance can help.


As a small business that employs 5 employees, you have been performance managing one of your employees. Following repeated written warnings for tardiness and rude behaviour, written notice of termination was provided to this employee. The employee was upset and felt that he had been treated unfairly and pursued a wrongful dismissal claim against the employer; even though the business had followed the Small Business Fair Dismissal Code, providing the employee with warnings before the termination.
ARAG appointed lawyers to challenge the jurisdiction of the Fair Work Commission and negotiated the withdrawal of the claim. The business had a nil excess. All legal costs were covered by ARAG.

Employee Protection

The business has placed an advertisement on Seek looking for employees. A 75-year-old sent in a CV and listed experience that was not relevant to the role. When the job applicant was advised they had been unsuccessful they brought a discrimination claim against them alleging age discrimination.
ARAG appointed lawyers to defend the claim and they demonstrated the applicant was unsuccessful as his CV showed he did not have the necessary skills or the inherent requirements of the advertised position. All legal costs other than the excess were covered by ARAG.

Employment Restrictive Covenants

Jane Doe and her employee have agreed to end the employees’ current employment by mutual agreement. The agreement included a restrictive covenant that prevented the employee from contacting Jane’s customers, suppliers and other contacts or ‘poaching’ their business or employees. There was also a confidentiality clause prohibiting use of confidential information obtained during the employment period.
However, some time after the employee left and moved into a different industry, Jane found out that a former client they had received a copy of Jane’s client list as well as details of Jane’s suppliers from the former employee. The former client now dealt directly with Jane’s suppliers and were going into business distributing Jane’s suppliers’ products themselves.
ARAG appointed lawyers to pursue damages from the former employee. After the commencement of legal proceedings, a damages settlement was negotiated with contribution to the legal costs paid to ARAG by the former employee. ARAG paid all legal costs incurred that were not recovered from the former employee other than the excess that Jane contributed.

Learn more by contacting your insurance broker to find out more, or visit

ARAG Services Australia Pty Ltd (ABN 14 627 823 198) (ARAG) has been granted delegated authority by the Insurer to enter into, vary or cancel Policies and handle Claims on their behalf. In providing these services, ARAG acts on behalf of the Insurer and not as Your agent. ARAG is authorised to provide financial services in accordance with its Australian Financial Services Licence (AFS Licence number 513547). Any advice provided by ARAG in relation to this product is general in nature and does not take into account Your individual circumstances.
The Insurer is detailed in your policy documents.

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