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Allianz School Insurance Ireland

Section 6 - Legal Expenses

Covers legal costs which may be incurred in relation to Pursuit or Defence of legal proceedings in certain clearly defined circumstances

What does the Legal Expenses section cover?

You will recall that Section 4 - General Liability and Section 5 - Indemnity to Management, cover the legal costs incurred in the defence of a legal action against the Board.

Section 6 - Legal Expenses allows the Board of Management to pursue (or to take) a legal action in certain circumstances.

There are two parts to the Section:

1. Legal costs which may be incurred in connection with a School Related Activity in relation to:

 (a) Pursuit of legal proceedings in connection with :
  (i) a dispute between the school and employees, past employees or prospective employees,
  (ii) a dispute between the school and any pupil, past pupil, prospective pupil or their parent or guardian.
 (b) Pursuit or Defence of legal proceedings in connection with:
  (i) a dispute relating to a contract for the sale, purchase, hire purchase, lease, hire, lease purchase or conditional sale of any goods or for the purchase or provision of services by the school,
  (ii) damage caused to the school, or any infringements of the legal rights of the school in relation to their ownership or occupation of the property.

The Limit of Indemnity (or maximum amount that the insurer will pay) is €320,000 in any one Period of Insurance.

2. The second part covers legal costs which may be incurred in any enquiry or investigation which may result in a claim under Section 5 or Section 6. The Limit of Indemnity (or maximum amount that the Insurer will pay) is €13,000 in any one Period of Insurance. The cover is also subject to the following special provision:

"the Company will only accept a claim under this Section if it offers reasonable prospects for success".

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Why does the Board have to ask the permission of Allianz before incurring legal costs?

As we have said, this cover was not available for many years because it was generally thought that no-one should be encouraged to take a legal action. With an availability of insurance for legal costs the opportunity for 'frivolous' actions arises.

Let us use a superficial example to illustrate the point - the Board may decide they wish to defend a case where breach of contract is alleged, even though it is accepted that there has been a breach of contract. Clearly, in these circumstances, it would be unreasonable for the Board to expect the Company to pay their legal costs.

For this reason the Board of Management must seek the approval of the Company BEFORE incurring legal costs.

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How can claims arise?

The Board of Management may wish to take legal advice when there is a dispute with a supplier of goods or services to the school.

The Board may wish to take legal proceedings against a person or persons causing damage to school property.

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Are claims under this Section different?

Yes. Under this Section the Board of Management is required to seek permission from the Company before it incurs costs which constitutes a claim.

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Does The Cover Not Seem Restricted ?

If it were not so it would be possible that the Board of Management could arbitrarily act without recourse to procedures or advice. Their action could be blatantly unfair and unwarranted, and any action brought against them would be indefensible. For this reason the insurance policy only provides protection against the reasonable action of the Board of Management.

The Policy refers to the appointed solicitor. Who is that?

Allianz has a panel of solicitors from which you may choose one to represent you. These solicitors are used by the Company in all liability matters and have been proved to provide excellent service.

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Why can't we select our own solicitor?

You Can ! The appointment of a solicitor from the Allianz panel is for the purposes of expediting the claim process. However, this does not affect your rights to appoint a solicitor or other appropriately qualified person of your choice in accordance with Article 7 of the European Communities (Non Life Insurance) (Legal Expenses) Regulations 1991. (N.I. - The Insurance Companies (Legal Expenses Insurance) Regulations 1990.

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What is not covered?

The following is a list of the principal Exclusions. Have a look at the policy for the others.

 1. Fines or penalties.
 2. Legal Costs and Expenses incurred Prior to the approval of and acceptance of a claim by the Company.
 3. Any prosecution deliberately or intentionally solicited by the school or any deliberate or intentional breach of contract.
 4. The first 10% of any claim to a maximum of €320,000.

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