What is Legal Expenses Insurance?

Written by Jennifer Ormond
15 November, 2021

Can you afford to pay an ex-employee £89,493 because you don’t have Legal Expenses Insurance?

How about a year’s salary instead?

Why do we ask? 

If a business lost an unfair dismissal claim in the employment tribunal the maximum award is £89,493 or a year’s salary, whichever is lower.  This is a huge cost to most businesses, even before the costs of legal representation are taken into account.  Incurring such huge costs can have devastating impacts on cash reserves, cash flow, and investment plans.

But what if there was a way to protect cash flow, cash reserves and allow for growth and investment to take place regardless of Tribunal awards being made?  Sounds too good to be true…but is it?


For years we have partnered with RK Henshall & Co, our independent insurance brokers to provide you with this solution! RK Henshall & Co work with us to provide our clients with Legal Expenses Insurance (LEI).

What is Legal Expenses Insurance?

In the event of an employment tribunal claim being issued against a business, Legal Expenses Insurance provides the beneficiary, the person who pays the premium, with cover in relation to: 

  1. the costs of preparing the defence to the claim;
  2. the costs of representation at the tribunal hearing(s);
  3. the cost of any compensation should a judge decide some needed to be paid to the employee.


RK Henshall & Co Ltd are an independently owned and managed Chartered Insurance Broker based in Wheelock, Cheshire.

“We are a business built over 45 years on Trust, Integrity and Professionalism, enhanced by our Chartered Insurance Broker Status.  We aim to maintain and enhance this standard of service to all our valued clients and continue to push boundaries to provide a wider portfolio of products and services for your benefit.

Terms and Conditions 

As with any insurance policy, there are terms that apply.  Although we will provide full policy details to clients if you maintain good communication with your lawyers at Employment Law Solutions the policy will protect you.

It is important to note that claims will not be covered in relation to redundancy where the action that gave rise to the claim happened 180 days before the start of the policy.

Frequently asked questions on Legal Expenses Insurance

Can I add legal expenses insurance to my contract? 

Of course, any client is given the opportunity to benefit from the insurance scheme when we discuss the best option for them, if they wish to add it on at a later date we can certainly do that.

How does this insurance cover me if you lose in the employment tribunal?

We take care of everything for our clients, we communicate with RK Henshall and they pay us for preparation and representation.  If the tribunal orders compensation to be paid, the insurer pays the compensation to us, we then transfer it to the claimant. Reducing the amount of work that our clients have to do.

How do you settle with the insurers on a tribunal case?

When we discuss the case with the insurer we will inform them of the potential value of the claim and the estimated work involved, the insurer will work with us to decide if a commercial settlement can be agreed upon.  Although this decision is not influenced by you, which can be frustrating, it does save you the stress of a tribunal hearing

What’s in it for Employment Law Solutions?

We do not benefit from your insurance premiums, recommending you to RK Henshall or recommending the LEI.  We do not get commission, bonuses, or referral payments from the LEI.  The only benefit is knowing that our clients don’t just get the best employment law and HR advice but also the best business protection too with RK Henshall. 

Get in touch through the form below. Alternatively, call us on 01270 781006


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