Protect your business’ rights with legal expense insurance

Every business needs to be prepared to defend its legal rights. Ex-employees may claim they were wrongfully dismissed, other businesses may challenge your patents or trademarks or you may get into a contract dispute with a customer over money owed. In order to compete fairly, you need to be in a position to assert your legal rights when required. Although standard Commercial General Liability (CGL) policies may pay your legal fees if someone sues you, what if you need to sue a third party? Or what if you need legal advice, but don’t have in-house legal counsel?

Legal Expense Insurance will cover your legal costs to defend or sue others in areas such as:

  • Personal injury cases
  • Contract disputes and debt recovery
  • Employment disputes
  • Criminal charges
  • Tax and license disputes
  • Property disputes
  • …and more

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Examples of scenarios covered by legal expense insurance

  • Wrongful dismissal – After trying everything to help an underperforming employee get up to speed, you are forced to let them go. You offer a generous severance package, but months later, you receive notice that your ex-employee is suing you for wrongful dismissal. How likely is it to succeed? Even if you win in court, will it be worth your time and legal costs? Does it make sense to settle out of court? What is a reasonable offer?
  • Contract disputes – Unfortunately, you get into a dispute with one of your customers, who refuses to pay you after your business provided services. You need advice around whether you have a valid claim against your customer, and legal power to recover any debt you are owed. With Legal Expense Insurance you will receive 100% of the money recovered, unlike collection agencies which typically take a significant percentage of recovered funds.
  • Defective products – One of your staff members discovers a design flaw in a new product. Thousands of units have already been shipped out, and you haven’t received any complaints. Do you need to recall the product? Do you need to notify customers? Could you be facing a class action?
  • Harassment – A current employee goes to their supervisor to complain about inappropriate behaviour of a senior leader within your business. Of course you’ll investigate and try to make sure that if the accusation is legitimate, the person responsible is held accountable, and that all your employees continue to feel safe in the workplace. But what are your legal obligations as an employer? Is your understanding of what constitutes harassment in line with the legal definition? Could the employee sue the business, even if you do your best to resolve the issue? Are you required to disclose the accusation to other staff?
  • Nuisance neighbours – The business situated right above yours has no regard for neighbourly love, and is incessantly disrupting your business activities from their noisy operations. They are ignoring your reasonable requests for quiet. Are you legally within your rights to take legal action against them? How would you go about doing this, and what are the legal costs?
  • Protecting your license – Your business risks losing its license due to actions from a regulatory or governing body, and you need legal support to defend your business and its license. Legal Expense Insurance can also help if you face a tax audit or need to appeal a CRA decision.

My business insurance includes a free legal helpline – is this legal expense insurance?

Several insurers will automatically include access to a Legal Advice Helpline with your business insurance policy. This is a really useful, often underused, feature as it allows you to call a legal expert and get their advice on just about any legal scenario you can imagine as it pertains to your business. How many times have you thought: “I wish I had a lawyer on retainer to pick their brains on an issue”? With a Legal Advice Helpline, you now have the ability to ask these questions – usually 24×7!

Legal Expense Insurance takes this one step further by turbocharging your legal advice with the payment of Legal Expenses when you need to defend yourself or take action against another person or business. Now you get not only the advice, but also the financial means to follow it up with legal action.

Can’t afford in-house legal counsel?

Tens of thousands of small businesses find themselves facing all the same legal challenges that larger businesses face, but lacking the scale and budget to afford in-house legal counsel, or even a retainer with an outside firm. Legal expense insurance allows your business access to the legal advice it needs, without having to worry about racking up billable hours. Call one of our experienced business insurance brokers to discuss whether this coverage might be right for your business.

Your business is unique, so are your insurance options.

Being a brokerage for over 70 of Canada’s top insurance companies means our commercial experts have access to a wide range of coverage options as unique as your business – at some of the best rates in Ontario. We sweat the details so you can focus on your business. Want to learn more about the coverage options available to you? Here’s a few of them.