Legal Expenses Insurance

An insurer must properly assess claims against policy requirements such as reasonable prospects of success, and must not rely on preliminary assessments without appropriate professional review.

An insurer must promptly obtain necessary information and instructions from a policyholder and proceed with obtaining counsel's advice without unreasonable delay, particularly where the policyholder is vulnerable.

An insurer must promptly reconsider a legal expenses insurance claim when material circumstances change, and cannot unreasonably require a policyholder to obtain independent legal advice to challenge a decline.

An insurer must handle claims promptly and effectively, and compensation for delays should reflect actual detriment suffered, not speculative losses.

An insurer may reasonably rely on a legal assessment of prospects of success (at least 51% likelihood) provided it is prepared or reviewed by an appropriately qualified person and contains no material factual errors.

An insurer is responsible for claims handling under ICOBS requirements but not for the day-to-day conduct of appointed solicitors, which falls under separate legal regulation.

An insurer may withdraw legal expenses insurance cover if counsel advises the claim lacks reasonable prospects of success (at least 51%), provided the insurer acts fairly in obtaining and relying on that advice.

Legal expenses insurance policies only cover insured events occurring during the period of insurance; claims arising from incidents that began before the policy started are not covered.

An insurer under a legal expenses insurance policy may refuse to appoint a nominated solicitor if it has valid concerns about the solicitor's competence and conduct, provided the policy terms allow such refusal and alternative dispute resol

A sales advisor cannot be held liable for failing to predict the outcome of a hypothetical insurance claim, and standard policy exclusions for pre-existing matters do not require special attention beyond standard disclosure.

An insurer may rely on a 90-day exclusion for claims where the originating cause of action arises within 90 days of policy inception, and this exclusion applies regardless of whether a subsequent notice of a different type is served.