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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.

We have Business Legal Expense Insurance products tailored for Small and Medium Enterprise’s, Sole Traders and Hospitality ensuring the right coverage for any legal matters that may come up in 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.

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

Sole Traders

Hospitality Industry

Case Studies

These are examples of how the policy would respond and are not real claims.

Case Study: Employment dispute

Julie 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 Julie’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. Julie won at Employment Tribunal. She only paid an excess as the legal costs were covered by ARAG’s Business Legal Expense Insurance.

Case Study: Contract disputes

A business leased a telephone system, photocopiers and printers for 3 years from ED but the equipment was defective and stopped working after 2 months. After complaining to ED seeking to cancel the lease, asking for replacement equipment and asking for a refund, ED refused all requests, kept issuing monthly invoices and threatened to commence debt recovery proceedings to recover unpaid lease payments. ARAG appoints lawyers to recover damages from ED. After proceedings were commenced ED agreed to pick up the equipment, refund all moneys paid to ED and terminate the lease. The appointed lawyers secured contribution to legal costs from ED and ARAG paid the balance of the costs incurred in the proceedings less the excess.

Case Study: Statutory Licence

Following notification of a salmonella outbreak which appeared to be linked to a business with a licence to store food, the Regulator imposed conditions on the licence to address contamination concerns. The business declared the licence to ARAG when it took out legal expense insurance. With the assistance of an ARAG appointed legal representative the business challenged the additional conditions having them removed from the license. ARAG paid all legal costs incurred apart from the $1,000 excess selected by the business.

Case Study: Property and goods

A Council owned land adjoining a business’ premises. A large pine tree was on Council land. The business had not insured its property. The tree roots caused damage to drains, footpaths and driveways on the business’ premises. The business wrote to Council claiming rectification costs and the Council declined to compensate ABC. ARAG appointed lawyers to bring a claim for damages in nuisance against the Council and after commencement of proceedings, the lawyers negotiated payment of compensation and a contribution towards legal costs. ARAG attended to the payment of the legal costs that were in excess of the contribution to legal costs recovered.

Want to know more?

Ask your Insurance Broker about Legal Expense Insurance or contact us if you want to know about other products we offer.

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.

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.