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Legal Costs Covered


You never know when you might need recourse to the law to solve a dispute:

Challenges to Directors

Case study 1

A company and its principal director were charged with offences under the Corporate Manslaughter Act following the death of an employee – the company has recently been convicted, the case against the director subsequently dropped.

Case study 2

A director found himself defending an action, brought under sex discrimination legislation, following the dismissal of a pregnant employee.

Case study 3

Two directors of a company which was in liquidation, with a total deficit of £216,000, were held jointly for £75,000 damages (plus interest and costs) arising from wrongful trading whilst the company was insolvent.


The insured hired a number of diggers for a new construction site they had been contracted to work on. They paid the company hiring the diggers in advance and gave specific instructions that the diggers needed to be made available to them on the first day they were to begin work so they were able to complete the work within their contracted time on the construction site. Unfortunately, the diggers arrived two days late which resulted in the Insured completing the work they have been contracted to do late by two days. This resulted in a cost penalty to the insured. They therefore wrote to ARAG making a claim for breach of contract against the hire company.

ARAG instructed a specialist contract solicitor who pursued the claim against the hire company. After a short period of correspondence, the hire company admitted liability and compensated the insured for the losses they had incurred. They also agreed to meet the legal costs incurred.


The insured agreed to a new contract for construction work and agreed that they would be paid in instalments for the job. After completing the work they were contracted to do, the final instalment for payment of £10,000 was not forthcoming. They wrote to ARAG making a claim for debt recovery.

ARAG instructed a solicitor who pursued the debtor for the monies owed. It turned out the company who owed the money had a cash flow problem and it was agreed that they would make two payments of £5,000 to the insured to pay the debt plus interest on the debt. ARAG paid the solicitor’s fees of £950.

Speak to us to ask about adding this valuable cover to your insurance programme now.