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In Depth: LEI as a proactive shield - the role of the insurance broker

shields

The widening access gap in legal systems, exacerbated by chronic underfunding and post-pandemic pressures, presents significant difficulties for individuals and businesses seeking justice and challenges for insurance brokers in effectively serving their clients. Izabela Chmielewska investigates.

Although many legal service options exist and satisfaction has increased, a shocking 3.6 million adults in England and Wales face unaddressed legal needs, according to The State of Legal Services 2020 Report by the Legal Services Board (LSB). This, coupled with the fact that 1.8m small businesses face a legal issue every year, reveals a critical justice gap crying out for immediate action.

The economic landscape has heightened the financial strain on clients, and the rising costs of legal fees in a resource-constrained justice system create anxiety and discourage individuals and SMEs from pursuing legitimate legal claims. This hesitation can translate into lost business for insurance brokers, as clients delay or abandon potential claims, fearing exorbitant legal expenses.

The legal landscape is morphing, with digitisation sweeping through the courts. This presents both hurdles and opportunities for brokers. Nicola Leighton, development director at Tysers Retail, insists “streamlined and intelligent workflows” are no longer luxuries but necessities in today’s digital landscape.

Leighton stresses the need to adapt. Still, she also emphasises how bespoke policy guidance, risk management, and empathetic claims support are the human-centric cornerstones where technology should amplify rather than replace broker expertise. 

“Brokers play a pivotal role in guiding clients through legal intricacies, ensuring the best courses of action for commercial and personal insurances,” states Leighton. “The shift towards digitalisation has led to substantial delays in the civil court system, creating an unwarranted strain on the relationship between brokers and clients who rely on swift resolution.”

For brokers, the justice gap presents a multi-faceted challenge. Limited access to legal counsel leaves many clients unable to afford representation, even for seemingly minor claims. This forces brokers to navigate complex scenarios without legal support, potentially impacting client outcomes and professional liability.

Legal expenses insurance – the opportunities and challenges

Facing unforeseen legal challenges can leave clients feeling anxious and overwhelmed. This is where brokers can help alleviate these worries by becoming trusted advisors, helping shield customers against financial and legal pitfalls. This is where LEI can become a powerful tool.

For over a decade, Chris Wilde, head of product retail & digital at Brown & Brown Europe, has championed the importance of LEI. He views it as an essential safety net, providing cost-effective access to immediate legal support. 

However, many brokers haven’t fully tapped LEI’s potential by tailoring coverage to address client needs directly. Wilde emphasises that LEI isn’t an “add-on” but a “value-added service” that solidifies client value within comprehensive risk management solutions. 

“From homeowners to business owners, everyone needs legal protection,” he says. “Brokers play a key role in clarifying where legal expenses fit within a client’s portfolio, whether in business policies or family packages.”

Wilde adds: “It’s a broker’s responsibility to provide a menu of options…, get the coverage right, then explain it clearly – LEI’s advantages and affordability will speak for themselves.”

The shift towards digitalisation has led to substantial delays in the civil court system, creating an unwarranted strain on the relationship between brokers and clients who rely on swift resolution.
Nicola Leighton, development director at Tysers Retail

Dean Spurdens, director at BJP Insurance Brokers, echoes this sentiment. He sees LEI as a proactive shield, not just a reactive defence. 

“Modern LEI policies offer extensive support and advice, helping businesses establish a sound legal footing, saving them significantly compared to searching for legal assistance after the fact,” states Spurdens. He also emphasises the importance of staying informed and educating clients. 

“Legal policies constantly evolve with the law,” explains Spurdens. “But additions like legal helplines and online tools make them even more valuable.”

He elaborates, describing how the focus has shifted from simply paying claims to “preventing legal trouble in the first place”, opening a world of benefits for clients, even if they never have to make a claim.

In doing so, brokers can become proactive educators. Each client faces unique vulnerabilities; if brokers take the time to understand their client’s unique professions and industries, they can personalise their advice by sharing relatable scenarios and case studies showcasing how LEI has benefited others.

ARAG challenges facing SMEs

Building trust and awareness

“Educating clients about the specifics of their policies is crucial,” says Leighton. “It is important to urge clients to engage directly and immediately with their providers, as the timing of reporting is key.”

“In the current economic crisis, having access to a wealth of legal knowledge, experience and advice at minimal cost is invaluable,” she adds. “Brokers must actively promote the importance of LEI. As trusted advisors, brokers play a significant role in guiding clients through the complexities of legal situations – providing support before, during and after a claim.”

Building trust and reliability as LEI brokers hinges on effectively assessing client needs beyond the initial policy issuance. As Wilde argues, regular conversations with clients are crucial to ensure they understand LEI benefits at the outset and address evolving needs during renewals.

“Brokers have the advantage of regular client interactions, making them ideal for ongoing education,” says Wilde. “LEI conversations should be repeated annually, even in renewal letters. Annual conversations allow us to say: ‘Your circumstances have changed’, or ‘Your business faces new risks’, prompting tailored recommendations.”

Wilde explains how using flyers and gentle email reminders can also help brokers raise awareness surrounding LEI and its benefits, especially with how access to the justice system is increasingly becoming more difficult.

“Ultimately, a broker’s core principle is to explain options and facilitate informed decisions,” he adds. “Brokers need to highlight the justice gap through social media, including input from legal experts. In doing so, we can raise awareness and emphasise that the access gap is a real issue and not just marketing speak.

A path forward – collaboration and innovation

LEI itself is not static but rather a dynamic entity constantly evolving to address the challenges of the justice gap. Tailored policy options cater to diverse client needs and budgets, making LEI more accessible. Technology integration streamlines the process, making it quicker and easier for clients to secure coverage. Furthermore, increased awareness campaigns demystify LEI and raise public understanding, paving the way for broader adoption.

The justice gap may appear like an insurmountable chasm, but LEI offers a bridge, a pathway towards a more equitable legal landscape. By promoting LEI, educating clients, and implementing effective client strategies, brokers can become powerful change agents. Their efforts can lead to increased access to legal representation, reduced financial burden for individuals facing legal challenges, and, ultimately, a greater public trust in the legal system. 

In this way, brokers can serve their clients better and contribute to a more just and equitable society for all. The choice is theirs: to stand by and watch the chasm widen or to take up the mantle of change and pave the way for a fairer future.

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