Legal expenses insuranceCover against your company’s unexpected legal expenses.
Essential insurance for new entrepreneurs
Legal expenses insurance should be taken out immediately after starting your business in order to include potential disputes from all contracts in the scope of insurance.
Avoid costly legal expenses
Your company's interests can be protected through legal channels without needing to pay expenses from business profits.
Also covers employment disputes
Employment contract disputes are some of the most common reasons for entrepreneurs to require legal advice.
Take out legal expenses insurance to protect your company against disputes
Your business operations may become involved in a variety of disputes requiring legal advice. As the costs of legal proceedings and legal advice may be high, it is sensible to prepare against unexpected costs with legal expenses insurance. It provides financial security and is an essential part of your company’s business liability insurance.
Legal expenses insurance allows you to prepare at reasonable cost for the costs of legal advice and legal proceedings in civil and criminal cases. Your company's interests can be protected through legal channels without your needing to pay the incurred costs from business profits. You can use the insurance in cases that are processed in Finland in a district court or arbitration proceedings.
Legal expenses insurance should be taken out immediately when setting up your business
If you are just starting your business, you should take care to ensure that your company’s legal expenses insurance is valid before agreeing your first contracts.
Typical contracts related to business activities include employment contracts and leases of facilities and equipment. Even in these cases, disputes are possible and your company may require legal advice.
As an entrepreneur, you should keep in mind that legal expenses insurance does not cover contracts that you have signed before taking out the insurance. Therefore, it is important to take out legal expenses insurance at the very start of business operations and never allow its validity to expire.
Our corporate legal expenses insurance is suitable for many different industries and nearly all small and medium-sized enterprises in Finland.
What does corporate legal expenses insurance cover?
Legal expenses insurance compensates for the costs of legal advice and legal proceedings in civil and criminal cases related to the company’s activities. The insurance typically covers expenses that arise in disputes over the termination of an employment contract or the company’s billing.
Examples of disputes where the costs of legal advice and legal proceedings are covered:
- The company has sent an itemised invoice for an agreed earthmoving job, but the client claims it to be partly unjustified and too high. The client files a written complaint about part of the invoice and refuses to pay the entire invoice. The company hires a lawyer to negotiate with the client and settle the matter out of court.
- An employee is prosecuted for embezzlement of the company’s cash funds. As the injured party, the company may demand compensation from the accused in court.
For more information, see the Legal expenses insurance product guide and insurance terms and conditions.
The expenses of a single minor dispute may already be devastating. Legal expenses insurance gives your company a budget for legal costs.
The policyholder, a construction company, had come into conflict with its former employee. The construction company had dismissed the employee because the latter had invoiced for too many hours, the level of their work was poor, in addition to their ignoring the employer's instructions to arrive at work on time.
The former employee challenged their dismissal, assisted by their union lawyer. They demanded compensation for unjustified termination of his work relationship, unpaid wages, holiday compensation and legal costs. The construction company denied the former employee's demand, assisted by their lawyer, and stated that the dismissal was justified and that the employee had no receivables from the construction company.
The dispute proceeded to a district court hearing, but in the end the matter was resolved between the construction company, and the district court confirmed the agreement. In the end, the former employee received a small compensation for wages that had been miscalculated and for holiday compensation. The construction company had taken out a Legal Expenses Insurance policy with Pohjola Insurance, which compensated the construction company's own legal expenses, excluding the VAT and deductible.