Contract and Debt Recovery Disputes

A dispute with a supplier or customer can have a significant impact on your business, but what can you do if a contract has been breached?

Protect your Business against the Cost of Contract Disputes with Legal Expenses Insurance

As a part of your Tapoly policy you have legal expenses insurance, which protects you against legal costs to bring or defend an action for a breach of contract. If you have a contractual dispute and are unable to resolve the situation, you should contact us, following the claims procedure as detailed on your policy wording. We will appoint a lawyer or mediator, who will help you to resolve the dispute as efficiently as possible.

Read our case study to see how legal expenses insurance works.

A small IT company got in touch after being accused of a breach of contract by a building company they had engaged to build an extension to their premises. The builders caused a series of issues which led to the customer losing confidence in the company and managing the project themselves. The building company then made a claim for breach of contract claiming £50,000 in lost profits.

It was agreed that there was more than a 50% chance of the defence being successful so a solicitor was appointed to act for the IT company.  Following mediation, a “drop hands” agreement was finally reached. The legal costs of £8,560 were covered under the policy for the IT Company and the problem went away.

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Support with Debt Recovery Disputes

Contract disputes are not the only challenge for contractors and small businesses. It can take just a single overdue invoice to cause a significant cashflow problem which could potentially disrupt your whole business.

Your Tapoly policy gives access to a Business legal services website. This provides a thorough and jargon-free digital law guide to help you get to grips with the legal debt recovery process. It will also give you access to customisable legal documents. You can easily create a suite of debt collection letters for unpaid invoices. Letters come with plain-English explanations and guidance notes and can be built for free.  

Help with getting to grips with the debt recovery process

If you do not receive a positive response when you have chased for payment you will need to escalate your claim by contacting us and completing a claim form.  We will assess your claim and, if it is covered, appoint a lawyer to take legal action on your behalf.  

Here’s an example of a debt recovery claim.

After completing their work, a small business was left without the final instalment of £10,000. They made a claim for legal expenses to pursue the debt through the courts. Under the insurance policy a lawyer was instructed to act, legal fees of £950 were covered and the debtor agreed to make two payments of £5,000 plus interest.

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Read about our Legal Expenses policy