BTE Insurance
Before the Event Insurance
Before the Event Insurance – also known as “BTE” – is a type of legal expenses insurance whereby customers purchase insurance to cover legal costs that may arise in either a personal or business context.
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Liability can result in expensive law suits and insurance is a sensible option for all entities, whether personal or commercial.
Typically, a business owner will have business insurance. The business, as the insured entity, may have the benefit of BTE built into the policy. If so, the business may be able to rely upon its benefit in various legal circumstances that arise out of the business.
It is possible to buy legal expenses insurance as a separate insurance, however most policies are added to existing policies as an ‘optional extra’, and that includes commercial BTE insurance that can be added to liability and all risks polices for a minimum premium.
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Consideration should always be given to any insurance policy that a client/potential client may already have. It should be read carefully so that the insured understands what, if any, cover is available to them to assist them in legal proceedings. Solicitors should always do a BTE check before they offer their clients a CFA arrangement and ATE insurance.
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What does BTE Legal Expenses Insurance do?
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Legal expenses insurance such as BTE is available so that in the event you require legal advice, the legal expenses insurance will cover the cost of that advice.
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A legal representative should suggest to any clients that they review all insurance policies that they are aware of, to establish whether assistance with legal costs is available, and what criteria must be satisfied to benefit from it.
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When should you notify your insurer?
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Most policies include a provision which states that the insured should inform the insurer as soon as they become aware of a potential claim. If this is not complied with, there may be argument raised by the insurer that they were notified and therefore refuse cover.
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What will it cover?
The insurance cover will usually pay for:
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your solicitor’s fees and expenses;
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costs of an expert witness (if applicable);
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court fees i.e. the cost of issuing the claim at court; and
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your opponent’s legal costs in the event that they become payable.
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The above is not a hard and fast rule on what BTE will cover. The insurance policy should be read carefully and clarification should be sought from the insurer if required.
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What it will BTE Insurance not cover?
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No legal expenses insurance will cover compensation that you may be ordered to pay if you lose your case.
Appropriate next steps
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If you find yourself in the unfortunate situation whereby you/your business are, or are likely to be in, a dispute with someone we would advise you to:
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seek legal advice; this is so that you may understand your position clearly in respect of the options that may be available to you (which could mean the avoidance of litigation altogether) as well as to discuss the various funding options that may be available to you – including BTE;
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contact your insurance provider to determine whether they will assist you by covering your legal fees; and,
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thereafter, the solicitor and the insurance provider can liaise to determine the appropriate next steps and advise you accordingly.