Protecting Your Commissions: Why Legal Expenses Insurance is a Game-Changer for Business Brokers

In the high-stakes world of business brokering, securing your rightful commission isn't always straightforward. Brokers invest significant time and resources upfront, often encountering disputes over fees once a deal is finalised. Without a robust strategy to address these challenges, brokers may face substantial financial risks.

At PLI Brokers, we understand these challenges and offer a tailored solution: Legal Expenses Insurance. This cost-effective policy empowers brokers to protect their commissions and pursue justice when disputes arise.

The Risks Business Brokers Face

• Upfront Effort, Delayed Payment: Business brokers work tirelessly to facilitate sales, often waiting until the deal is complete to receive their fee. This leaves them vulnerable to disputes.
• High Litigation Costs: Legal battles can be prohibitively expensive, often discouraging brokers from pursuing disputes, even when they have a strong case.
• Limited Access to Justice: Without financial backing, brokers may struggle to defend their rights and recover their hard-earned commissions.

Real-World Case Study

The Scenario:
A business broker was hired to sell a mid-sized retail business, with a success fee agreement included in the contract. After working diligently to find buyers and negotiating a successful sale, the broker was met with a major roadblock.

The Dispute:
The vendor disputed the broker’s $80,000 success fee, claiming they had already been in contact with the buyer prior to the broker’s involvement. The vendor argued the broker did not contribute to the sale.

Key Issue:
The broker’s agreement lacked a strong “effective cause of sale” clause, which the vendor exploited. Pursuing legal action to recover the fee would cost an estimated $50,000 - posing a significant financial risk.

How Legal Expenses Insurance Makes a Difference

With Legal Expenses Insurance, the broker could have confidently pursued their claim without worrying about exorbitant legal fees.

• Coverage: Up to $250,000 per claim, with a $500,000 aggregate limit per policy.
• Cost-Effective: Starting at approximately $750 annually or just $85 per month.
• Comprehensive Support: Tailored advice and coverage for a wide range of disputes, including:
  • Client contract disputes
  • Sale contracts
  • Services contracts
  • Employment disputes
• Quick Setup: Policies can be finalised within two business days.

The Peace of Mind You Deserve

Legal Expenses Insurance not only provides financial protection but also ensures access to expert legal representation when you need it most. Whether it’s pursuing a disputed commission or defending your rights, this policy is a powerful tool for brokers navigating complex transactions.

Are You Protecting Your Commission?

Disputes over commissions can happen when you least expect them. Without the right protection, you risk significant financial losses. Don’t leave your hard-earned fees to chance.

Take action today with PLI Brokers’ Legal Expenses Insurance. Starting at just $85 per month, it’s an investment in your peace of mind and financial security.

Ready to protect your commissions? Submit an enquiry today.

With PLI Brokers, you can focus on closing deals, knowing we’ve got your back when it matters most.