Business legal expense insurance (BLEI) has the potential to provide affordable legal expense insurance to Micro, Small and Medium Enterprises (MSMEs) in India, which have traditionally depended upon independent law firms in the event of litigation. This study explores the possibility of offering BLEI in India to enable MSMEs to hedge against litigation risk. The study highlights the stakeholders of the BLEI value chain, products and services offered, types of risk covered by BLEI and the claim and settlement process for BLEI based on the available evidence. This study also explores the possibility of offering BLEI to 63 million MSMEs in India. Based on the 10-year average annual legal expense of a sample of 1822 MSMEs and using the chain ratio method as a forecasting technique, this study suggests that the potential size of the market for BLEI among MSMEs may range between ₹291 billion (the US$3.84 billion) to ₹417 billion (the US$5.50 billion). However, this will necessitate an enabling regulation for the insurance industry, improvement in the efficiency of the legal system, and insurance service providers’ ability to utilise advances in technology and digitalisation to offer BLEI at an affordable price. The emergence of legal technology companies in India suggests that there is a felt need for an alternative legal service provider, which has the potential to allow business owners more time for engagement in productive business purposes.
