How savvy brokers can get ahead of clients’ legal costs

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Commercial legal expenses insurance is gaining traction with Australian brokers as a practical way to protect business cash flow, provide early access to legal support and save heartache

FOR MOST business owners, legal risk sits somewhere near the bottom of the priority list. Growth, cash flow, customers, operations – these are the pressing daily concerns of business life. Legal problems feel remote, until they aren’t. When an invoice goes unpaid, a supplier relationship sours or a staff termination goes sideways, suddenly a legal dispute looms and what felt manageable starts to consume time, strain working capital and generate professional fees that aren’t in the budget. This is the territory that commercial legal expenses insurance is designed to address. “Many business owners assume legal support is already built into their insurance program,” says Jon Willmott, director and head of liability at Keystone Underwriting. “In practice, that is not always the case.” The usual policies businesses rely on – public liability, professional indemnity, cyber – all respond to specific

Keystone Underwriting is an Australian specialist underwriting agency providing tailored insurance solutions to brokers and their SME clients. Underwriting exclusively on behalf of certain underwriters at Lloyd’s, Keystone combines strong security with responsive local decision-making. The business is known for its practical, no-nonsense approach, giving brokers direct access to experienced underwriters who understand complex risks and act decisively. Its product suite spans financial lines, liability, property, accident and sickness, medical malpractice, life science and specie. With a focus on service, quality products and long-term partnerships, Keystone continues to build a strong reputation in the Australian market.

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Trade payment defaults climb steadily since mid-2025

Trade payment default index (all sectors) for Australian businesses

“Many business owners assume legal support is already built into their insurance program. In practice, that is not always the case”

Jon Willmott, Keystone Underwriting

categories of risk. What they don’t typically cover are the day-to-day commercial disputes that businesses encounter regularly. “Many of the matters businesses commonly face are different in nature,” Willmott explains. “They may involve unpaid debts, breached agreements, lease disagreements, supplier conflicts, reputational concerns or the need for early legal advice before making an important decision.” Even if these issues don’t threaten the existence of a business, they can disrupt operations, strain relationships and create costs that compound over time. Savvy brokers can stay ahead of such problems through commercial legal expenses insurance. Cash flow is where disputes do real damage The financial impact of an unresolved legal matter often runs well beyond the cost of advice or representation. Willmott points to the ripple effect that a single delayed payment can generate across a business. “A business may be profitable on paper yet still feel immediate strain when money is tied up or legal costs begin to mount,” he says. According to CreditorWatch trade payment default data, overall business health in Australia has deteriorated since mid-2025. In a tighter operating environment, business strain can touch wages, supplier payments, stock purchasing and tax obligations simultaneously. Commercial legal expenses insurance can help reduce that pressure by supporting covered matters and enabling earlier access to professional advice.

“Often, timely action can make the difference between a manageable issue and a prolonged financial burden,” Willmott says. “Rather than delaying decisions because legal costs feel uncertain, business owners may be better placed to respond with confidence.” The timing of access to advice matters. A dispute addressed early, while positions haven’t hardened and options remain open, is far more manageable than one allowed to drift. Prevention is better than cure One of the distinguishing features of commercial legal

expenses insurance is that it doesn’t only respond after things have gone wrong. Willmott is clear about this dimension of the product. “Early advice can help businesses make informed decisions before positions harden or costs escalate,” he says. “Sometimes it can also clarify whether pursuing a matter is commercially worthwhile at all.” Practical examples bear that out. A business owner considering a staff termination might seek advice first and avoid an unfair dismissal claim. A concern about a contract might be raised before a relationship breaks down entirely. A debt matter can be pursued while recovery prospects are stronger. This access to support at the point of decision can be at least as valuable to businesses as the litigation cover itself. “For many owners, knowing experienced support is available at the first sign of trouble can be just as valuable as the policy,” Willmott says.

Relevant across sectors, not just professions Commercial legal risk doesn’t belong to any single industry. “If a business has customers, suppliers, staff, contracts or premises, it’s likely to face some level of exposure,” Willmott says. Scenarios can vary considerably across sectors. Hospitality businesses deal with staffing and lease issues. Trades businesses encounter payment delays and disputes over scope of works. Retailers face supplier challenges and customer complaints. Professional services firms need to recover unpaid fees or protect their reputation. “The scenarios differ, but the underlying challenge is the same,” Willmott says. “Legal friction can interrupt momentum.” This breadth of relevance is part of what makes the product worth considering for a wide range of clients, rather than treating it as something suited only to businesses in higher-risk industries or those with prior claims experience.

A different kind of conversation for brokers For Australian brokers, commercial legal expenses insurance opens up a more expansive conversation with clients about risk. Willmott sees it as an opportunity to move beyond the traditional focus on low-frequency, high-severity events. “Many insurance discussions understandably focus on low-frequency, high-severity events,” he says. “Yet clients often feel the impact of more frequent commercial issues far more regularly.” The product allows brokers to widen that conversation to include cash flow protection, earlier dispute resolution, and reduction in uninsured legal spend. Importantly, it sits alongside existing covers rather than displacing them. “It can complement existing policies rather than replace them, sitting alongside liability, professional indemnity, cyber, management liability and business package covers as part of a more rounded insurance solution,” Willmott explains.

Close up of a lawyer calculating expenses, with a legal contract, gavel, and law books on the table.

Published 15 Jun 2026

“[Commercial legal expenses insurance] can complement existing policies rather than replace them, sitting alongside liability, professional indemnity, cyber, management liability and business package covers as part of a more rounded insurance solution”

Jon Willmott, Keystone Underwriting

Jan 2025

Feb 2025

Mar 2025

Apr 2025

May 2025

Jun 2025

Jul 2025

Feb 2026

Mar 2026

Apr 2026

100

150

200

Note: Seasonally adjusted (Feb 2020 = 100)

Source: CreditorWatch Business Risk Index

How brokers can broaden the discussion

Commercial legal expenses insurance allows brokers to move beyond asset protection and explore areas such as:

Source: Keystone Underwriting

preserving cash flow

resolving disputes sooner

accessing legal advice early

reducing uninsured legal spend

strengthening overall risk management

Brokers who can present this kind of thinking tend to build stronger client relationships, particularly with business owners looking for practical support rather than a product catalogue. A product for the current operating environment The commercial environment has shifted in ways that make this cover more relevant than it might once have been. “Costs are higher, margins can be tighter, and disputes may escalate quickly. Matters that once might have been absorbed informally can now carry a much greater financial impact,” Willmott points out. For business owners, greater resilience means less time diverted from running the business. For brokers, it’s an opportunity to deliver something clients will actually feel the benefit of well before a major claim ever arrives.

“Keystone Underwriting has focused on positioning commercial legal expenses insurance as straightforward cover with clear business relevance and support that helps clients respond early and appropriately when disputes occur,” Willmott says.