This is standard policy on legal insurance and also applied to the BASC policy, before it was removed from membership subs with no cost reduction to the subs. This statement is true and can be checked.
Yes, it is a standard condition - but here's the thing:
it is uniquely problematic for firearms-related LEI, because even if you win against the police at court, you are highly unlikely to recover your costs. This is a real problem for all firearms related legal insurance, even for the easier SGC (as opposed to FAC) stuff. Another standard clause in LEI policies refers to the prospects of success. Here again, the way firearms cases play out in court is likely to discourage an insurer, because the legal system is, unfortunately, loaded against the claimant.
In my personal opinion, the unique features of firearms court cases may discourage an LEI company's solicitors from taking up your case in the first place. And even if they do, if too many cases start coming in from any source, the insurance company has an incentive to start ramping up its fees at every annual review, or imposing increasing onerous restrictions and exclusions, or both, to keep the financials tilted in its commercial favour. When BASC discontinued its experiment with LEI (which had not been funded by commensurate increase in membership fees) it did so with a public announcement. Others orgs simply canned their LEI without being so candid. Still others continue to offer it, but I never seem to be able to find out how many of cases are actually funded, let alone won at court.
I am sceptical about LEI. In my own opinion, the best option is not to get into court in the first place, but to negotiate via a good firearms team, who probably know more than most solicitors anyway.
I recently read in my NGO magazine that the org has started offering LEI as a bolt-on, for an extra £27.50. The third party that provides this is called Side by Side Insurance. I have looked at their website and they claim to have firearms specialists on board - and that is a key positive, to my mind. On paper, the offer looks better than others - for what that's worth. However, I think the outfit is relatively new, so may not have track record yet. Above all, insurance is a financial product and you would have to satisfy yourself that they provide what you need for your specific circumstances.
I am not an insurance broker, but I have looked into the LEI issue at some length for my own for my own personal needs and spoken to legal experts. You really do need to do your own research. Don't take any promotional literature at face value.