Why self-employed professionals should consider legal expenses insurance

The protection that LEI offers typically fills the gaps that many other liabilities policies don’t cover.

As a self-employed freelance contractor, the most attractive aspect of this insurance could be its coverage for tax investigations, which can include IR35 enquiries. However, there’s much more to LEI than that.

In this blog, we look at the key points to the policy and how self-employed professionals can benefit from this type of cover.

What cover does LEI feature? 

Legal expenses insurance provides you with up to £100,000 of cover in any one claim and includes:

• Employment disputes and compensation awards
• Identity theft
• Contract disputes
• Property disputes
• Landlord and tenant disputes
• Criminal defence
• Tax investigations
• Regulatory compliance issues
• Court attendance costs
• Employment extra protection

Some of these issues can leave you having to pay thousands of pounds in costs out of your own pocket if you are not insured.

Why does my business need this type of insurance? 

Legal expenses insurance will enable you to:

• Pursue a client where they have breached a contract.
• Defend against an unfounded allegation of you being in breach.
• Have representation when HMRC investigate your business’s tax affairs.
• Be represented when the Health & Safety Executive conduct an investigation, for example, after an accident occurred at your business premises.
• Have representation present if you’re required to attend a police interview under caution concerning an alleged criminal matter in connection with your business.
• Cover expenses incurred in attending jury service.
• Defend yourself against an allegation of discrimination by a former employee.

How the policy can help in the event of a tax investigation 

• When HMRC begin an IR35 tax investigation into your limited company they can request a lot of information including evidence to support your IR35 status.

In this instance it's important to have an expert to handle your case and guide you through the process to ensure all the documentation you submit is correct.

• IR35 investigations can be lengthy and complex and costs can stack up.

Legal expenses cover provides £100,000 of cover for representation costs in the event of a tax investigation, meaning you aren’t having to cover the costs out of your own pocket.

• Before, during and after an IR35 investigation you may need to seek advice.

The policy provides access to free helplines to guide you in IR35 issues, tax advice, legal advice, business law and counselling.

Is legal expenses insurance available to all self-employed professionals?  

Legal expenses insurance is available to most self-employed people, however, the policy is not available to charities and community groups, nor is it currently  available for manual tradespeople, but this is being addressed and a launch of the policy for trades is imminent, watch this space.

Contact Markel Direct today for more information about the legal expenses insurance.

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Sources:

https://www.caunceohara.co.uk/ir35/guides/tax-enquiry-legal-expenses-cover-can-help-event-ir35-investigation/

https://www.caunceohara.co.uk/four-great-reasons-to-purchase-legal-expenses-insurance/