This article was produced in partnership with ARAG.
Bronwyn Hardy, of Insurance Business, sat down with Natasha Gale, CEO or ARAG Insurance, to discuss the arrival of legal expenses insurance in Australia.
For the uninitiated, legal expenses insurance, or LEI, is a pursuit and defence insurance cover. It can be likened to health insurance, where you can take various levels of cover, and it responds to an event that doesn’t necessarily need to be your fault, or you don’t need to sustain any kind of property or financial loss. It’s an insurance that covers you for legal costs, and sometimes damages or charges or adverse costs, where you would normally be held personally liable. It covers the gaps when other insurance policies may become too expensive, or they don’t respond. It is not a pre-requisite to have other regulatory insurances in place. LEI covers events that are outside of normal insurable events.
The product only recently become available on the Australian market, unlike in Europe and other parts of the world where it is long-established, where as many as one in three individuals are already reaping the obvious benefits.
Natasha Gale, CEO and director of ARAG Australia, is determined to make more Australians aware of what she believes to be an imperative class of insurance.
“In recent times, standard insurance has gone up by anywhere between 25% and 35%,” Gale said. “What that means for small businesses is that access to insurance has become limiting. And we see that our product gives an alternative to some of those more cost- and capacity-restrictive insurances like public liability, professional indemnity management liability. We offer a product that covers those gaps where the other insurances may fall short. What LEI is offering is an alternative cover to some of those more restricted insurances, and offering legal protection.”
Frighteningly, Australia has become the third most litigious country in the world, after the UK and United States, with at least one in five of us being involved in a legal dispute over the last five years.
“Anyone that earns over $150,000+ a year isn’t covered by Fair Work, for example,” Gale revealed.
“So, if you have an unfair dismissal claim or you have a grievance with your employer and you earn over that amount, you can’t rely on them. You have to engage an employment lawyer. And they can range from anywhere between $500-$1,000 an hour, and then you have to put on a defence. So often people just walk away from these situations. This is why we’re trying to educate the community and the broker market about LEI. Businesses also struggle to pursue their legal rights - often making commercial decisions NOT to pursue a matter based on the high legal fees that are associated with acting. ARAG believes everyone should be able to access their legal rights, regardless of their financial position.”
ARAG is currently the largest legal expenses insurance provider in Europe and is unique in what it can provide here.
“In Australia, we’re the only ones that can provide LEI as a standalone option,” Gale said. “A lot of our competitors bundle it with another offerings. So, it’s usually either a more condensed offering or part of a package.
“LEI is about being proactive. It ensures you have something in place that’s protecting you and your family, or you and your business. No, you may not use it every single day. But you know, when you do need it, it will be there.”
Natasha Gale
Currently CEO of ARAG Australia, Natasha Gale has had three decades in the finance and insurance industry in banking, general insurance, premium funding and underwriting agencies. She has held senior roles within organisations such as Westpac, Allianz and Wesfarmers.
As a people-focused leader, she enjoys embracing change and building commercial performance within a team and motivating individuals and organisations to do the same.
The one constant in all her roles has been her focus on people and her passion for leading a business through rapid change and growth. As an authentic people leader, she is driven to inspire and mentor others to deliver commercial and cultural outcomes throughout the insurance industry.
