Why Do Businesses Need Legal Expense Insurance?

Life is complex and running a business can be unpredictable. Legal matters can arise in many aspects of the day to day running of a business and accessing the legal system can be complex, costly and time consuming. Legal Expense Insurance is a cost-effective and smart way to ensure businesses have a level of comfort and security to pursue their legal rights when disputes arise, without the added economical cost.

Our Business Legal Expense Insurance is tailored for SME's and Sole Traders, ensuring they have the right coverage for any legal matters that may come up in their day to day operations.

What We Cover

We can help businesses to overcome a range of common legal business problems, for example:

A dispute with an employee escalates and can’t be resolved, for example being sued for unfair dismissal by an ex–employee

If someone damages, trespasses or causes a nuisance to your business premises

A business licence is threatened with the revocation or suspension

The business is subject to a tax investigation or audit

A contractual dispute with a supplier and/or customer


For a full description of policy cover, conditions and exclusions, please read the policy wording. Limits of Indemnity apply to the product. Contractual and Tenancy disputes (Business Elite) are an additional module to Business Comfort.

Levels of Cover
Business Comfort
Business Elite
Legal Information Helpline
Document Centre
Employee Protection (unlawful discrimination)
Employment Restrictive Covenants
Criminal Prosecution Defence
Property and goods
Identity Theft
Statutory licence
Compliance & Regulation
Tax Protection
Contract disputes Not Included
Tenancy disputes Not Included

Not all businesses are the same which is why ARAG has developed cover for Sole Traders and the Hospitality industry. To know more, get in touch with us today, contact us at (02) 8066 0162 or at

Sole Traders

Particularly Sole Traders often have limited resources and are vulnerable to legal complexities in their daily operations, juggling multiple stakeholders. There is a plethora of challenges that face Sole Traders when they start out. Ensuring they have the right cover and protection shouldn’t be one of them.

Despite the freedom that comes with running their own business, they face many risks. They are personally liable for all debts incurred through the business can wipe-out their personal assets. Accessing capital, clients paying outstanding accounts and tax can be challenging due to the company profits and personal income crossover. Along with these risks, Sole Traders juggle operational challenges with financial responsibilities. They are the “go to” for all administrative, insurance and legal matters. Not having the right advice or the right insurance cover can leave their business exposed.

That’s why ARAG have tailored their business legal expense insurance cover, to support Sole Traders across a range of industries. Ensuring they are covered for the things they need, and not paying for the things they don’t - like employment.

Hospitality Industry

The hospitality industry is bound by regulations and licences which can expose the businesses to risk with employees, patrons and suppliers. Hospitality Legal Expense Insurance gives the opportunity to pursue and defend themselves against disputes that could occur in their daily operations.

Navigating the legal environment can be complex and expensive and with all the changes and restrictions that the hospitality industry has to adhere to - It may make financial sense for a business to protect its organisation and legal position.

A special rate applies to Sole Traders, contact our team today to find our more on (02) 8066 0162 or email

Premium Examples

The premium payable for Business Legal Expense Insurance is based on a range of circumstances. To help you understand what we consider when calculating premium, below are some premium examples. These describe the premium amount that would be payable based on an example set of circumstances. These are examples only and not a quote. All quotes are assessed by our underwriting team based on your individual circumstances.

Claims Example: Employment dispute

Policyholder B operates a retail store and received a claim for unfair dismissal and unlawful deduction of wages by one of their former employees. The employee was seeking $20,000 in damages. ARAG appointed a lawyer to work on Policyholder B’s behalf and they assessed the prospects of a successful defence to meet the requirements of the policy terms. Mediation was attempted but the matter could not be settled. The matter was complex and was listed for a two-day hearing. Policyholder B won at Employment Tribunal. Policyholder B only paid an excess as the legal costs were covered by ARAG’s Business Legal Expense Insurance.

Claims Example: Contract dispute butcher

The meat ordered is of poor quality upon delivery. The butcher demands the highest of standards from his meat supplier and returns the entire shipment. However, the wholesaler does not agree and demands payment. The dispute is pending so that the butcher is ultimately summoned. Due to legal representation on behalf of his ARAG policy, the dispute is resolved.

Premium Example: Small Bakery

Policyholder P owns a small bakery in Sydney. He has 2 part time and 2 full time employees. His annual turnover is $750,000 and his annual salary payments including superannuation are $300,000. He takes out Business LEI but does not add the optional ‘Contract disputes’ cover (so has opted for Business Comfort cover). He has had no prior legal issues, therefore he has opted for a lower limit of $100,000 per claim ($250,000 in the aggregate) with an excess of $1,000. His premium is $1,170 per annum, inclusive of GST, Policy Fee and Stamp Duty in NSW.

Premium example: Large Retail

Policyholder E owns an exclusive jewellery brand with 5 stores in Sydney. Across the 5 stores she employs 15 full time and 25 part time employees. For the 5 stores, her annual turnover is $3,000,000 and she is paying $1,500,000 in salaries including superannuation. Policyholder E takes out Business LEI and, as she is working with several independent contractors, she opts for the Business Elite cover (meaning she has added ‘Contract disputes’ cover). She would prefer not to have an excess and chooses the claims limit of $150,000 per claim ($250,000 in the aggregate). Her premium is $9,570 per annum inclusive of GST, Policy Fee and Stamp Duty in NSW.

Important things to know

This is a pricing indication only for businesses in NSW, based on an example set of circumstances, and is not a quote. All quotes must be assessed by our underwriting team and quoted on an individual basis taking into account the relevant circumstances of the policy holder. Prices may vary between states and territories, including due to different stamp duty rates. Terms, conditions and exclusions apply to this insurance cover, please refer to the policy terms and conditions.

For More Information

To find out more or how you can offer ARAG’s Business Legal Expense Insurance products to your SME clients, please contact us now on . We would love to hear from you!

The insurer of ARAG Legal Expense Insurance products is HDI Global Specialty SE – Australia (ABN 58 129 395 544, AFS Licence number 458776) (Insurer). ARAG Services Australia Pty Ltd (ABN 14 627 823 198, AFS Licence number 513547) (ARAG) has been granted delegated authority by the Insurer to enter into, vary or cancel policies and handle claims for ARAG Legal Expense Insurance products on the Insurer’s behalf.
All enquiries should be addressed to ARAG.

Any advice contained on this website is general advice only and has been prepared without considering your individual objectives, financial situation or needs. Before purchasing or renewing a product we recommend that you consider if it is suitable for your circumstances and read the policy terms and conditions.