You may already have Before The Event (BTE) insurance. Your car, motorcycle, home contents, business, or building insurance policy may be covered by a BTE insurance policy which can help protect you if you or your small business face litigation.
This article explains what BTE insurance is, what it covers and how it can be used to help support you during legal proceedings.
What is BTE insurance?
BTE insurance is a type of insurance policy that you and/or your business can purchase to cover legal costs in the future. It will cover some or all of your potential cost liabilities in subsequent legal proceedings.
What does BTE insurance cover?
Included in most BTE insurance policies is the cover for:
- Solicitor’s fees and expenses
- Expert witness fees
- Court fees, i.e. the cost of issuing the claim at court
- The other party’s legal costs if you lose your case and the judge makes adverse costs order against you.
It is vital to check the policy contract and the terms and conditions to ensure you have the coverage your small business needs should it face litigation proceedings. It is advisable to purchase a Before The Event insurance policy to cover future potential issues.
BTE insurance will not cover the cost of any compensation payment or award the court or arbitrator orders you to pay to your opponent. The compensation could be for a personal injury, losses from fraud, medical expenses, etc.
What is the difference between BTE insurance and ATE insurance?
BTE insurance is taken out before the prospect of legal action arises and, as mentioned above, is sometimes included in pre-existing insurance policies.
On the other hand, After The Event (ATE) insurance is purchased after a legal dispute has arisen and is usually arranged by your solicitor.
Do I have to use a panel solicitor from my insurance company?
Your insurance company will likely contact you about the solicitor you choose to appoint.
However, they cannot legally insist that you use one of their panel solicitors.
Your insurer must honour the policy regardless of which solicitor or law firm you appoint to advise and represent you. If you do wish to use your solicitor or law firm, always ensure that they are registered with the Solicitors Regulation Authority.
However, the insurer will likely require the self-appointed solicitor to:
- Provide a detailed breakdown of the nature of the case
- Confirmation of the solicitor work required
- The rate of those solicitors working on it
- Whether the matter has reasonable prospects of success
What to do in case of dispute?
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:
- Search for legal advice; this is so that you may understand your position clearly in respect of the options that may be available to you, as well as to discuss the various funding options that may be available to you, including BTE
- Contact your insurance provider to determine whether they will assist you by covering your legal fees
- The solicitor and the insurance provider can liaise to determine the appropriate next steps and advise you accordingly.
Business disputes legal advice
Get legal assistance from LawBite
Our dispute resolution solicitors will check if you have an existing BTE insurance policy before applying for ATE insurance on your behalf. You can trust us to ensure your best interests are protected, and you are not paying twice for litigation-related fees.
LawBite is well experienced in helping businesses resolve disputes quickly and cost-effectively. If you need legal advice and would like to speak to one of our experts in business disputes, book a free 15 minute consultation or call us on 020 3808 8314.
Additional resources
- How can alternative dispute resolution help small businesses?
- What is an Arbitral Tribunal?
- Understanding Early Neutral Evaluation (ENE)
- What is the Arbitration Act 1996?
- What is After The Event insurance (ATE)?
- Public Liability Insurance - what you need to know
