Today’s columnist: John Leigh, Building a strong defence

Brian Hulstone has been hit with a 10,000 euro hospital bill after falling ill on holiday and his insurance company have refused to pay.
Brian Hulstone has been hit with a 10,000 euro hospital bill after falling ill on holiday and his insurance company have refused to pay.
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There’s lot’s of debate at the moment about the existence of zero hour contracts.

However most SMEs are probably more concerned about their exposure to ever increasing legal changes covering a wide range of issues.

It’s tough enough trying to make a profit and stay in business and made harder if you have issues dealing with employment problems with a member of your workforce.

Keeping pace with developments to employment law is now a full-time job. However, the majority of SMEs are unlikely to have an in-house legal or human resources department, or the available funds to cover legal disputes as they arise.

So unless a company has in-house legal expertise it can be very expensive to ensure compliance on all issues and can place considerable strain on the resources of a small business.

Unfortunately, we are currently witnessing a claims culture where a significant amount of bogus claims are being made against small firms.

Such a climate inevitably leads to increased legal fees, compensation awards and tax enquiry fees which can all threaten the financial stability of a business.

Against this backdrop, business owners are confronted by new legislation, including employment rights, working time regulations and disability discrimination.

So it has never been more important for small businesses to manage their risks and seek suitable legal expenses cover to protect them against the potential legal costs they may face.

The typical areas of cover are for employment disputes, health and safety, taxation, prosecution defence, property disputes and contracts to name but a few.

As soon as a business owner becomes aware of a potential employment issue they can contact their legal expenses helpline, which provides access to 24-hour legal advice covering everything from help on health and safety and employment issues through to tax information and support.

Importantly this means mitigating the potential of being taken to an employment tribunal by the employee. If the situation develops the legal expenses policy will normally pay for legal costs incurred in defence of a claim and provides peace of mind to the business owner.

At IFM we recently handled a case where an employee made allegations of harassment and bullying against a member of staff.

The allegations were unsubstantiated and clearly the employee was trying to seek compensation from our client without just cause.

However, with guidance and support of the legal helpline no formal claim was ever made, as our client was able to demonstrate there was no case to answer.

Our client told us that without legal expenses cover they could have incurred substantial legal costs of their own and also may have been able to follow correct procedures, therefore allowing the employee to win compensation.

Many small businesses don’t think it will ever happen to them.

Others are just too busy keeping the business going and haven’t thought about the possibility of legal disputes and how these can affect them.

With employment and contractual disputes on the rise, legal expenses cover provides a cost-effective way to protect your business and provide peace of mind.

* John Leigh, Director at Sheffield Broker IFM Insurance