Legal Expense Insurance Law and Legal Definition

Legal expense insurance is a type of insurance policy that covers policyholders against potential costs of legal action against them.

Example of a state statute on Legal expense insurance.

The Florida Insurance Code defines ‘Legal expense Insurance as follows:

“Fla. Stat. § 642.015 (3) "Legal expense insurance" means a contractual obligation to provide specific legal services, or to reimburse for specific legal expenses, in consideration of a specified payment for an interval of time, regardless of whether the payment is made by the beneficiaries individually or by a third person for them, but does not include the provision of, or reimbursement for, legal services incidental to other insurance coverages.”

A Legal Expense Agent is anyone who acts on behalf of an insurance company to create a legal relationship with a third party, who wishes that the insurance company cover their legal expenses. The Legal Expense Agent acts with the approved authority of the Insurance Company. It is mandatory under Florida Insurance Code that the insurance agents should be licensed and appointed by any insurance company as per the statutory requirements.

The Florida Insurance Code defines an ‘agent’ as follows:

“Fla. Stat. § 626.015 (2) "Agent" means a general lines agent, life agent, health agent, or title agent, or all such agents, as indicated by context. The term "agent" includes an insurance producer or producer, but does not include a customer representative, limited customer representative, or service representative.”

Florida Insurance Code also prescribes licensing and appointment of insurance agents:

“Fla. Stat. § 626.112. License and appointment required; agents, customer representatives, adjusters, insurance agencies, service representatives, managing general agents

(a) No person may be, act as, or advertise or hold himself or herself out to be an insurance agent, insurance adjuster, or customer representative unless he or she is currently licensed by the department and appointed by an appropriate appointing entity or person.”