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Management_Liability_InsuranceIf you are running a business, you will have made sure you are insured if anything happens to your employees, premises, equipment and stock. Losing any of these could have a major impact on the financial survival of your business.

What you may not have considered is a scenario where you could lose your own personal property or wealth. After all, your company is a limited company and therefore has limited liability so there is nothing to worry about. However, as a director of the company your liability is unlimited. If a claimant cannot get full compensation from your company, they are entitled to seek redress from the assets of its directors.

Directors and company owners often make decisions that entail an element of risk. If, because of a decision you have made, the company is sued for negligence or a wrongful act, claims can be made not only against the company but also against the company directors. This could have massive implications on your own wealth and lifestyle. Legal and investigative costs can run into hundreds of thousands of pounds and that’s before any compensation or fines are levied by the courts.

Management liability insurance
This insurance cover has been specifically developed for companies with a turnover of up to 50 million. It is taken out in addition to your usual commercial and property insurance and does not add very much in the way of premium to your standard insurance costs.

The cover includes directors’ and officers’ liability and company legal liability, employee dishonesty cover and legal pursuit.

You can also include pollution clean up costs and cyber-crime liability.

Access to employment, legal and regulatory advice is available with this policy to help you to manage a critical situation that could have devastating consequences for the company and its directors.

Why risk your own personal wealth now and in the future for a small additional cost?

Some of the decisions you make as a director now may not have an impact for years to come. You will still be liable for those decisions even if you have left the company. The last thing you want is to be caught up in a claim after you have gone.

This insurance cover is ideal for small to medium sized businesses that are just as vulnerable to this type of claim as larger corporations. It is often easier to reach and identify the owners of these companies.

Peace of mind is not easy to come by these days; for the price of a few sandwiches and drinks at your next board meeting, you could protect your company directors from claims on their personal wealth and the company from a devastating loss of funds.

To get a quote for your peace of mind, simply go to the contact page on our website and fill in your requirements and one of our team will contact you with more information about how management liability insurance works and the amount of cover you will need for your company.
If you or your business is found to be in material breach of health and safety law, you will have to pay for the time it takes the Health & Safety Executive (HSE) to identify the breach and help you put things right. This includes investigating and taking enforcement action and is called ‘Fee For Intervention’ (FFI).

HSE_Intervention_FeeIf it transpires that you have not broken the law, then you won’t pay anything. Dutyholders who comply with the law, or where there is no material breach, will not be charged FFI for any work that HSE does with them.

FFI applies to dutyholders where the HSE is the enforcing authority. This will include:
employers
  • self-employed who put others at risk
  • public and limited companies
  • general, limited and limited liability partnerships
  • Crown and public bodies
What the law says
The Health and Safety and Nuclear (Fees) Regulations 2016, link to external website say that a fee is payable to HSE if:
  • a person is contravening or has contravened health and safety laws; and
  • an inspector is of the opinion that the person is or has done so, and notifies the person in writing of that opinion.
What is a material breach?
A material breach is something which an inspector considers serious enough that they need to formally write to the business requiring action to be taken to deal with the material breach. If the inspector gives you a notification of contravention (NoC) after their visit, you’ll have to pay a fee.
The NoC must include:
  • the law that the inspector considers has been broken
  • the reason(s) for their opinion
  • notification that a fee is payable to HSE
Where an inspector simply gives you advice, either verbal or written, you won’t have to pay anything for this advice.

How much it costs
It currently costs £129 an hour. The fee will include the costs covering the time of the entire original visit. The total amount recovered will be based on the amount of time it takes HSE to identify the breach and help you put things right (including associated office work), multiplied by the hourly rate.
Your fee may include the inspector’s time:
  • at your business or workplace
  • preparing reports
  • getting specialist advice
  • talking to you after the visit
  • talking to your workers
The fee can vary depending on:
  • how long the original visit was
  • the time the inspector spent helping you put things right
  • the time it took the inspector to investigate your case
  • any time we spend on taking action against you
Find out more
The Guidance on the application of Fee for Intervention (FFI) document (also available in Welsh) sets out the general principles and approach of the scheme. It includes examples of material breaches but does not cover every scenario where FFI might apply.

Inspectors will apply this guidance and their enforcement decisions will be based on the principles of HSE’s enforcement decision-making frameworks – the Enforcement Management Model (EMM) and the Enforcement Policy Statement (EPS).

The Guidance on the application of Fee for Intervention (FFI) document (also available in Welsh) sets out the general principles and approach of the scheme. It includes examples of material breaches but does not cover every scenario where FFI might apply.

Some Management Liability or Directors and Officers insurance products provide cover to protect against FFI.

If you would like to discuss your own Management Liability Insurance or D&O policy then please contact us on 0121 321 4600 or send an email to info@clarisksolutions.co.uk
Health_and_SafetyTwo recent cases of accidents in the workplace resulting in court cases being brought against companies and directors by the Health and Safety Executive highlights the increased risks to employees in these sectors.

The cases below are just two examples of the many court cases and fines imposed on companies in breach of health and safety regulations.

The first case involved an HGV driver who suffered fatal injuries while coupling the HGV tractor unit to a trailer.

**Speaking after the case, HSE inspector Jessica Churchyard said “This tragic incident led to the avoidable death of a young man, and was caused in part by the failure of his employer to implement and monitor safe systems of work to prevent vehicle runaways.
“This death could have easily been prevented if his employer had acted to identify and manage the risks involved, and followed the industry guidance.”


The second case resulted in the amputation of a demolition worker’s left arm and right hand.

**HSE inspector Rohan Lye said after the hearing: “If the company and its director had taken basic steps to decide how to do this routine task, and what control measures to use, they could have prevented this devastating incident resulting in an employee suffering life-changing injuries.”

In the first case involving the HGV driver, the company was fined £170,000 and ordered to pay costs of £6,268.80.

In the second case, the company was fined £150,000 and ordered to pay costs of £9,523.04. In addition, the company director was sentenced to ten months imprisonment, suspended for two years and ordered to complete 200 hours of unpaid work.

Insured risk
In both cases the companies would have had to pick up the fines. Your Employers’ Liability insurance policy will generally (depending on your policy wording) cover you for:
  • Employee compensation
  • Employee and criminal proceedings defence costs
  • Court attendance compensation
Even if you have Directors and Officers insurance as well, neither will cover the cost of an HSE investigation or resulting fines or time in prison.

How to minimise your risk of prosecution
As the two quotes above from HSE inspectors imply, both incidents could have been prevented if the employer had implemented effective risk management and approved codes of practice.

To protect your business, you will need to manage your safety documentation, training records and risk assessments etc. Every business has most of this in place but very few can easily and quickly put their hands on it and rely on it being up to date.

Our partnership with health and safety specialists “Health and Safety Assist” can help you with this.
Their online portal is a secure resource and provides access to your own safety management hub. The portal will help you simplify and efficiently manage all of the documents necessary to meet your health and safety responsibilities and comply with the relevant standards for your business sector.

There are also a host of added benefits that you can exploit as the portal becomes more bespoke to your business. It could lead to reduced insurance premiums by demonstrating you have proper management of your workplace risks and compliance with health and safety legislation.

To find out more about how working with Health and Safety Assist can save you money, protect you from prosecution and a hefty fine or prison sentence, please contact one of our team.

**Contains public sector information licensed under the Open Government Licence v3.0
The supreme court has ruled that the Employment Tribunal fees paid by employees, if they want to take their employer to court, are illegal.

Employee-Tribunal-FeesHow will this affect your business?
Since the introduction of Employment Tribunal fees in 2013 there has been a 79% decrease in cases being brought. ACAS conciliation service think there will be a large increase the number of cases brought in future. Their records show that 2/3rds of the employees they advised did not proceed with their claim because they would have to pay tribunal fees.

Now these fees have been dropped, you may need to consider how to improve the management of employee relationships in future, to avoid a tribunal claim.

What can you do to protect your business from a claim?
Along with reviewing your HR procedures, you should also check insurance policies to see what sort of cover you have in case one of your employees brings an Employment Tribunal claim.

On your commercial insurance policy, you need to check that you have a Legal Expenses extension. This will cover you for all types of claims including unfair dismissal, discrimination and TUPE claims.
The Legal Expenses insurance will cover your defence costs and any settlements or awards made by the court.

Alternatively, if you have Directors and Officers insurance, this will cover defence costs if you are involved in court cases with employees as well as shareholders, regulators and other organisations.

Employment tribunals can be complicated and therefore time consuming and costly. Making sure you have adequate cover to defend your case will help to mitigate the risk of a costly court case to your business.

Employees in future will have nothing to lose by making a claim against their employer even if they only have a slim chance of winning.

To discuss the best options to protect your business, please call us on 0121 321 4600.
Last year the government scrapped the dividend tax rate and introduced a 7.5% basic tax credit and a £5,000 tax-free amount. These measures resulted in an increase in the tax take from the director/shareholders who pay themselves smaller salaries with a higher level of dividends.

Because of the higher dividends, this group represents the vast majority of individuals who would breach the £5,000 dividend tax allowance.

The cut to £2,000 of the dividend tax allowance seems to confirm a continued appetite by the chancellor to raise more revenue from the same group of individuals.

It means an increase in dividend taxation of up to £225, £975 and £1,143 for basic, higher and additional rate taxpayers respectively.

Extracting Profit
What, if anything, can the director/shareholder do? There are three main profit extraction methods: salary, dividends and pensions.

If the director/shareholder does not require the extracted profits for day-to-day living expenses, they should consider extracting these profits by way of an employer pension contribution, where it will still enjoy considerable tax advantages.

The employer pension contribution will usually be deductible as a legitimate business expense, reducing the company’s corporation tax bill.

The wealth will then pass to the individual without tax deduction or charge assuming the contribution is within the various annual allowances.

Taxable dividends are still more tax-efficient than taxable salary.

Directors and officers insurance
Directors-and-Officers-InsuranceChanging the way remuneration for directors is calculated is just one example of an event that could affect your income.

Though it may not be possible to insure against changes in government policy, you can protect yourself against other claims.

A D&O policy will typically cover; claims from shareholders against the management, employment tribunal costs, Health & Safety Executive enquiry costs, legal and defence costs and damages arising from employment practices and discrimination.

Why businesses need D&O Insurance
  • Increase in claims against directors.
  • Growing litigious society.
  • World has no boundaries - risks associated with the legislation and regulation in any country in which it operates.
  • Absence of risk management making them more susceptible to errors.
  • You could lose everything including homes, possessions and investments.
  • Legal Expense cover is not enough.
  • Disputes following Family Fallouts - Smaller firms may be in family ownership.
  • Regulators are getting tougher.
Can you afford not to take out? For the price of a few cups of coffee per week this additional insurance cover could save your family home.

UnderinsuranceSmall and medium sized businesses need commercial insurance to cover their premises, contents, machinery and equipment. If you are sourcing your business insurance online and your only consideration is to minimise the cost of the premium, you may find that your insurance cover leaves you out of pocket if you need to make a claim.

Underinsurance is a common problem. 40% of businesses do not have enough business interruption cover to get them back on their feet (Building Cost Information Service 2012).

Rebuilding costs
The sum insured should take account of the actual rebuilding costs, not the market value. Depending on the type of property, reinstating the building back to a useable position following an incident may cost more than you think once you include materials, labour and professional fees, not to mention loss of earnings during the rebuilding period. In 25% of SME claims reviewed by the FCA, the indemnity period expired before they returned to a normal trading position (FCA thematic review of SME claims TR15/6 2015).

Business interruption insurance
The consequences of an insured incident could result in reduced or complete loss of income from your business for an unknown period. It is therefore important to check how long the indemnity period is on your insurance policy. Two years is likely to be needed for a business to fully recover to its original trading level.
These calculations can be complicated, considering all of the eventualities that could delay getting your business back up and running; for example, delays in planning permissions when rebuilding, long lead times for replacing stock or machinery and replacing customers lost due to downtime.

This is where a broker can offer their expert advice. Depending on your business circumstances they may suggest a declaration-linked, non-average basis of insurance, because it provides an uplift of 33% providing that the sum insured is correct initially and declarations are made when requested by insurers. Alternatively, a policy that is based on the estimated amount of gross-profit or revenue that you expect to earn.

Legal liability claim
Claims against your business can come from a variety of risks and insurance is designed to provide adequate levels of cover of usually £5 to £10 million. The types of cover to consider include:

  • Employers liability
  • Public and products liability
  • Directors and officers liability
  • Cyber threats
  • Environmental liability
  • Professional indemnity

You will have to assess the risk levels within your own business to determine whether the level of cover is going to be enough for your individual circumstances.

Benefits of using an insurance broker
Insurance is complex and it is not easy to assess all of the risks associated with your business and to select the most suitable insurance policy to meet your needs. Get it wrong and you could jeopardise the future of your business.

An insurance broker will be able to offer advice and select the most suitable policy for your business. They can arrange accurate valuations to ensure you have exactly the right amount of cover in place when you need it.

Have you reviewed your business insurance recently? Does it provide adequate cover to secure the future of your business should events take a turn for the worse?

Commercial-business-insuranceBusiness is constantly changing and risks need to be evaluated every year to ensure new threats to your business are covered. Fortunately, insurers are continually introducing new insurance products to meet these future business challenges. If you use an insurance broker, they should be making you aware of these new products and recommending updates to your policy. However, if you rely on simply renewing your existing insurance online without the support and advice of a broker, you may find that over a period of time, your insurance policy is insufficient to cover these new threats.

Your commercial business insurance will cover you for insured risks such as fire and theft, but you may need to check you are covered for more specific threats.

Cybercrime insurance
Statistics published by the government in 2014 stated that an estimated 81% of large companies and 60% of small businesses suffered a data breach. With an average cost of £600,000 to £1.15m for large businesses and £65,000 to £115,000 for smaller ones, cybercrime is no small problem.

Technology now connects millions of people both in business and socially due to the rise of connected devices and access to information. This trend has in turn led to a rise in the number of hackers who have the ability to launch cyber-attacks. These can arise from a number of sources both internally (unhappy staff, lost devices, poor data encryption) and externally (hackers, third party suppliers losing data).

Often clients assume cybercrime is covered under general liability. It’s not.

Liability Insurance
  • Professional indemnity
Providing professional advice as a freelance Consultant can be risky. If you were to accidently provide incorrect advice or omit to pass on relevant information, you could be liable to legal action against you or your business.

Professional Liability insurance cover is designed to meet your individual requirements and will pay for the legal costs of defending an action against you.
  • Directors and officers
Specifically developed for senior personnel and management. Directors and Officers insurance provides protection from legal action that could result in a claim against Director’s homes, possessions and investments.

Having legal expenses and PI cover in place is simply not enough, for example a PI policy does not provide cover against actions pursued by shareholders or employees.

Frequently taken out by larger companies, SME’s are sometimes slow to realise the potential benefits of a Directors and Officers policy. The fact is, a smaller business could be more vulnerable because it may have less stringent corporate governance procedures in place and therefore it is even more important to consider this cover.

Insurance against bad debt
Non-payment of your invoices can be a significant risk for small companies. You can protect your business against this risk by purchasing bad debt protection. Bad debt policies are tailored to each individual company, taking into consideration the type of industry, years in business, equity position, existing assets and liabilities, payment records and revenue.

According to “Company Check” more than half of small businesses have had to write off money owed to them as a bad debt in the past 12 months. If this was applied to the UK as a whole, the Federation of Small Businesses state that this would have affected a staggering 2.8 million companies.

In 2015 more than 7,000 trade credit insurance policies were taken out by small businesses. The Association of British Insurers figures show that £149 million was paid out, the equivalent of £3m per week to support businesses when a customer defaulted on payment.

Future protection
No one knows what insurance cover will be needed in the next few years. Change is happening at a faster rate and technology is advancing every year. One thing is certain, insurers will be developing new products to meet the demands of their customers and the first to hear about these new products will be your insurance broker.

Keep in touch with your broker regularly and they can advise you of the most suitable and affordable insurance for your company to ensure your business is protected into the future.

 
In early 2016 the discovery of a piece of plastic in a Snickers bar in Germany triggered a recall that saw manufacturer Mars withdraw its chocolate bars from the shelves of retailers across a staggering 55 countries.

On investigation, it transpired that the offending piece of plastic was part of manufacturing machinery originating from its factory in the Netherlands. Even though only a single foreign object was found it was enough to cause a health and safety recall costing the confectionary giant millions of pounds of lost sales.

Most companies plan for a loss scenario of a couple of day’s product manufacture that may be affected before the problem is identified, however in the case of Mars it was six months! It can be argued that smaller companies do not have multiple manufacturing sites and therefore the risk is somewhat minimised.  But should an incident arise, it is not just the cost of the products that have to be recalled but the negative publicity that comes with it and possible legal costs.

The challenges are not limited to incidents occurring within the supply chain. There is of course the threat of damage to property with nearly 10% of the largest fire losses in the UK being in the food and drink sector (Allianz), of that material damage is usually around 50% and 27% is the business interruption loss. As well as the risk of fire, the threat of flooding continues to affect businesses across the UK.

Before you open the factory doors, it would be wise to check you have all of the adequate insurance policies in place and for the correct amounts of cover.

At CLA Risk Solutions we are on hand to offer free advice and a review of your insurance cover to ensure that you obtain the most relevant insurance policies for your business.

Commercial-Insurance-1For example, CLA can offer a comprehensive policy designed to run in conjunction with your Commercial Combined or other primary insurance. Designed for UK registered private companies with a turnover of up to £50m and charities, clubs or associations with up to £2m income.

Cover includes:
  • Directors’ and Officers’ or Trustees’ Liability up to £5,000,000 limit any one claim on a worldwide jurisdiction basis
  • Company Legal Liability up to £5,000,000 limit any one claim
  • Pollution clean-up costs included up to £25,000
  • Cyber Liability included
  • Employee Dishonesty cover included for £100,000 limit any one period of insurance
  • Employment Practices Liability up to £5,000,000 limit any one claim as an optional section
  • Professional Negligence cover included (for charities and associations only)
  • Access to Employment, Legal and Regulatory advice
  • Crisis public relations advice helpline
Call one of our Account Managers for more information.
Directors and Officers Insurance

It all started back in 1929 with the Wall Street crash, when it was felt that many directors involved could face legal action from angry shareholders. Increasingly popular in the USA, Directors and Officers insurance over the past few years has started to emerge in the UK too. It is a common misconception that legal expenses or professional indemnity insurance provide all the cover needed, however this cover is not always adequate.

Directors-and-Officers-InsuranceEven if you have been involved in the running of a limited liability company for years without a problem, your personal assets could still be at risk. FACT: It is not just companies that are at risk, any director, officer or employee carrying out supervisory functions can face unlimited personal liability for actions they take on behalf of the company.

Having legal expenses and PI cover in place is simply not enough, for example a PI policy does not provide cover against actions pursued by shareholders or employees. Frequently taken out by larger companies, SME’s are unfortunately slow to realise the potential benefits of a Directors and Officers policy. The fact is, a smaller business could be more vulnerable because it may have less stringent corporate governance procedures in place and therefore it is even more important for them to consider cover.

A D&O policy will typically cover; claims from shareholders against the management, employment tribunal costs, Health & Safety Executive enquiry costs, legal and defence costs, and damages arising from employment practices and discrimination.

With tougher stances from the regulators the risk of investigation and fines is on the increase. In 2013 fines from the Financial Conduct Authority totalled £474m, a 50% increase on the £312m its predecessor, the FSA handed out in the previous year. A D&O policy may not cover the fine, but behind every investigation there is a significant drain on management time, legal defence expenses and potential brand damage.

Why businesses need Directors and Officers cover
  • Increase in claims - Regardless of the size of the company, they are increasingly seen as targets for criticism.
  • Growing litigious society - Employees, shareholders, investors and creditors know their rights and are far more likely to take action against a company and its directors.
  • World has no boundaries - With an increase in global business, it leaves directors exposed to risks associated with the legislation and regulation in any country in which it operates.
  • Absence of risk management - Often smaller firms can’t afford adequate risk management systems which make them more susceptible to errors.
  • You could lose everything! - D&O claims pose a threat to directors’ personal assets including their homes, possessions and investments.
  • Legal Expense cover is not enough - This should not be seen as an alternative to D&O as limits tend to be lower and provide defence costs only rather than damages as well.
  • Family Fallouts - Smaller firms may be in family ownership and therefore disputes can lead to shareholder rifts and greater exposure to litigation claims amongst relatives.
  • Regulators are getting tougher - The risk of investigations are increasing and so are the associated fines. Failing to have D&O cover could be a costly mistake.
 
High net worth insurance provides premier insurance cover for all of your possessions, members of your family and can also provide cover when any of you travel abroad.

We understand that as a high net worth household you will need an insurance policy with the ability not only to protect your individual requirements, but also gives you a whole raft of additional services:
  • Valuation service
  • Security advice
  • GP helpline
  • Home sitting service
  • Jewellery repair and replacement service
  • Specialist vehicle repairers
  • Premium courtesy cars
  • Vehicle breakdown and recovery
  • Personal injury physiotherapy cover
  • Travel advice
Antique-vaseCLA are an experienced high net worth insurance brokers with the ability to tailor exactly the right amount of cover for your needs. This can include items you take with you when you travel abroad, possessions belonging to grandparents while they are in a nursing home and items belonging to your children while studying away from home.

High value home insurance
Valuation of high value properties should be undertaken by specialists to ensure adequate cover is maintained for the full re-building cost based on age and status of your home. We can arrange for experienced valuers to assess your property so that any claims can be handled quickly and for the exact amount they are worth.

High value contents insurance
Antiques, collectibles or the latest gadgets can all be individually valued for the right amount to ensure you are fully covered. As your broker, we can arrange independent valuations for all of your possessions including works of art and jewellery.

We can even arrange for details of specific items of jewellery to be recorded so that repairs or a replica can be made to replace the lost or damaged item.

Quality_carsVehicle insurance
High value cars require a higher level of support than a standard motor insurance policy can provide. Should you find yourself off the road for any reason, you want to be confident that you will receive the full replacement value of your car or be able to arrange for specialist repairs to be undertaken. You would also expect a similar premium level of courtesy car while yours is off the road.

Travel insurance
Whether you are travelling for business or pleasure, you can add travel insurance to your home insurance cover. The policy will cover any member of your family and domestic staff. No need for separate policies, everyone will be covered under the one policy for the entire year.

Complete peace of mind
If you need additional cover for marine craft or any other specific items, call us to arrange a meeting with one of our Account Managers to discuss your individual requirements.

 
"Be afraid, be very afraid” business Directors, Officers and Senior Executives have been warned, as increasing numbers fall in to cracks left in their insurance, leaving them potentially personally liable for a wide range of compensation claims.
 
Directors-and-officers-insurance-sThe “it won’t happen to me” attitude could be leading to company decision-makers cutting corners on this crucial insurance area, according to industry pundits. Ironically, Directors and Officers Liability Insurance has never been more important. The regulations governing business are growing fast, and willingness to seek compensation is keeping pace.
 
Yet with a local independent insurance broker, CLA on your team, you could have research and advice at your fingertips to guide you to the right protection for your line of work. And if ever you did find yourself facing a non-compliance claim or criminal investigation, your broker will help you reap maximum benefit from your Directors and Officers Policy.
 
Civil, criminal and regulatory actions are becoming all too common. The regulatory burden is almost as hot a topic as the state of the economy, as small and medium sized firms grapple with the pressures of compliance across 100s of issues. Health and Safety, Data Protection, Disability Discrimination, Racial, Sexual and Age Discrimination, the Insolvency Act, EU Directives and regulations, Consumer Protection, Copyright Data Protection, Pollution control – the list of “red tape” tying business down is growing.
 
Any infringements to legislation and other issues could leave company Directors paying from their own assets – like their home – if their firm is unable to pay. Negligence, default, breach of duty and breach of trust can all lead to investigations and actions, including criminal charges. You could even find yourself up against a charge of involuntary, constructive or gross negligence manslaughter, if someone is killed by your equipment, falls from your roof or dies from a road accident involving one of your vehicles.
 
But your liability could come under the spotlight for something far less dramatic – such as leaking confidential data,  revealing trade secrets or being culpable for a pollution problem.
 
It’s a myth that if your job title is not Director you are safe from civil and criminal prosecutions or action for regulatory bodies. If you are a senior decision-maker, it is your door they can come and knock on. All of this is ample reason to make absolutely sure you are covered with the right Directors and Officers insurance policy for you. An independent local insurance broker like CLA can guide you through all the options, help you identify all the risk areas, set the right limits for your business and research the most competitive premiums. We get to know your business and help you identify those risks which could trip you as a decision-maker. We can then create a Directors and Officers insurance policy that is specific to you, with appropriate limits, to give you peace of mind.
 
Then if you do ever face a non-compliance or criminal charge, we will be easily accessible and highly responsive. We can get your claim dealt with as quickly as possible, giving you the financial cushion you need to fight your case.