Optional Holiday Home Legal Expenses Insurance

Running a holiday letting business is generally trouble free. However, when things do go wrong there can be lengthy and costly legal disputes. With the rise of no-win, no-fee solicitors, the chances of having a case brought against you are on the increase.

What would you do if…

• A guest at your holiday cottage threatens to sue you because you have deducted from their security deposit for damage, or they are demanding a refund because they were unhappy with their stay.
• You have a boundary dispute with a neighbour over land or parking.
• Holidaymakers cause a trail of destruction at your holiday home, and you want to pursue them for the cost of the damage.
• A guest books a stay at your holiday cottage for a week and refuses to leave.
• A guest failed to pay the outstanding balance for renting your holiday cottage and you want to pursue them for the money owed.
• You have a dispute with the builder who has done some work at your holiday cottage.
• H M Revenue and Customs investigate your personal tax affairs.

All these are examples of problems holiday home owners face. Although stressful to deal with, you don’t have to face them on your own.

What does legal expenses insurance cover?

Second home legal expenses insurance is designed to help cover the cost of legal advice and litigation should a dispute relating to your holiday home arise. Legal protection typically provides insurance to cover up to £50,000 to help you pursue or defend a claim in the following situations:

Consumer pursuits: Legal costs to pursue a legal action following a breach of a contract for buying or renting goods or services for your private use in relation to the insured property.

Property infringement: Legal costs to pursue a legal action for nuisance or trespass against the person or organisation infringing your legal rights in relation to the insured property.

Property damage: Legal costs to pursue a legal action or financial compensation for damages against a person or organisation that causes physical damage to the insured property.

Consumer defence: Legal costs to defend a legal action brought against you following a breach of a contract you have for selling goods (in a private capacity) in relation to the insured property.

Tax: Legal costs incurred by an accountant if you are subject to an HM Revenue and Customs full enquiry into your personal income tax position.

Occupier eviction: Legal costs to pursue eviction proceedings against an occupier to recover possession of a residential property owned by you, where the occupier fails to perform their obligations set out in an agreement to occupy the insured property.

Legal & tax helpline: 24/7 legal advice helpline to discuss legal problems that arise.

What legal expenses may not cover

It’s important to note that typically policies will not pay costs for legal proceedings if there are no reasonable prospects of success or if the amount in dispute is lower than the estimated advisers’ costs to act for you.

How much does legal expenses cover cost?

The cost of adding legal expenses insurance to your policy is typically between £15–£50 a year depending on your insurer.

How to take out cover

The annual holiday let legal expenses insurance offered by Schofields is an optional add-on policy when taking out or renewing your holiday home insurance. Full details of the cover, limitations, and exclusions will be provided so you can understand the cover provided.

For many holiday let landlords, legal expenses insurance is a useful safeguard to deal with the potentially high costs of legal disputes.