Legal Expense Insurance

Legal Expense Insurance Ontario

As a business owner, you have a lot on your plate between pleasing your customers, managing your employees and building the success of your business. There are a million daily decisions, many of which require your direct input. Regardless of what type of business you run, your day-to-day commercial activities leave you exposed to a wide range of scenarios in which you may need legal assistance that varies from a quick chat on the phone to get legal advice all the way to litigation that requires a full court strategy from a law firm.

But as anyone who has had to deal with legal disputes in the past already knows, the cost of legal services can be prohibitive. Most business owners can only afford a $500 hourly rate with legal counsel if they suffer some financial setbacks. In fact, many Canadian businesses that rightfully deserve their day in court end up walking away from the situation without recompense because they can't afford to obtain the level of legal services they would need to resolve the problem in legal proceedings. Or, they may end up paying far more than necessary for costs such as tax because they needed help accessing the essential legal advice they needed to avoid those expenses. Get access to justice and accurate, qualified legal advice whenever you need it by speaking with the experienced brokers at Morison Insurance about a legal expense insurance quote. Ontario businesses are likely to encounter a situation that requires legal services. You can protect yourself from the high cost of those services by adding legal expense insurance to your business insurance policy.

What is Legal Expense Insurance?

With legal expense insurance (LEI), which is also referred to as legal protection insurance (LPI) or just legal insurance, Ontario business owners can access a wide range of legal assistance, from calling legal helplines for advice—without the need to file a claim—to getting insurance compensation to recover the cost of representation for a legal proceeding and other costs associated with obtaining legal services for an unexpected legal matter. Legal insurance is a type of commercial insurance coverage designed to get policyholders the legal help they need, whether the legal case is brought to court by the policyholder or against them. That includes expenses such as attorney fees, court fees, expenses for witnesses and experts, translation costs and adverse costs, should a judgment be made that you're responsible for your opponent's legal expenses.

If you either had someone bring legal action against you and your business or you are in a situation where you need to bring someone else to court as a plaintiff, your legal expense insurer would provide the necessary funds to pay for those costs, up to the coverage limit on your insurance policy.

Before-the-Event and After-the-Event Coverage

When considering legal expense insurance, Ontario residents should be aware that two types of event insurance are available in Canada: before-the-event (BTE Insurance) and after-the-event (ATE insurance). Understanding the different types of event insurance is essential to ensure you have the correct legal expense insurance coverage for your current situation.

Before-the-event coverage, as the name suggests, is a type of insurance that is already in place before a litigious situation arises. Like most insurance, it protects against possible events that may take place in the future. ATE insurance, conversely, applies to litigation costs resulting from an event that has already occurred before the legal insurance was purchased. Bodily injury cases are an example of a situation where after-the-event coverage is typically purchased. For obvious reasons, ATE coverage is usually purchased by policyholders who still need to get BTE insurance in place.

Who Should Have Legal Expense Insurance?

If your business already has an in-house legal team, there's no point in purchasing legal expense insurance. Ontario businesses typically don't have internal lawyers on staff, so they need legal expense insurance. It's possible that, throughout operating your business, you'll never need legal advice or representation—but it's far more likely that you will need occasional legal support for your business, and that's why it makes sense to invest in legal expense insurance coverage.

Whether you run a massive shipping facility, a cozy little café, or anything in between, the potential to need legal services is always there. Legal disputes are very costly, and even seeking legal advice can strain your budget or cause financial setbacks. Legal expense insurance gives you the peace of mind that comes with knowing you can access the legal support you need to ensure your business continues to thrive. The types of businesses and commercial enterprises that can benefit from legal expense insurance include the following:

• Small and medium independent businesses
• Corporations
• Institutions
• Associations
• Partnerships
• Sole proprietors
• Clubs and groups (sports clubs, for example)

What Does Legal Expense Insurance Cover?

Generally speaking, legal expense insurance covers the cost of the entire litigation process, including investigation, pleadings and discovery, mediation and arbitration before the trial, settlement and, in cases where it's required, appeal. It applies to legal defence costs, trial defence, court attendance expenses and more. You may need to bring legal action against someone or defend yourself in court for many reasons. Legal expense insurance coverage can be used for costs associated with issues such as:

• Bodily injury
• Contract disputes
• Employment disputes
• Protection of property
• Protection of statutory licenses
• Tax audits

What is Not Covered By Legal Expense Insurance?

Legal expense insurance provides coverage for most kinds of legal expenses. Still, some costs related to legal services can not be claimed under a policy for legal expense insurance. Ontario business owners should expect their insurance carrier to refrain from providing coverage for inquiries into insurance claims status or for insurance claims determination. Legal services such as draft letters, review of contracts or legal documents and case-specific research are generally not covered either. However, policyholders may be able to access some of those services depending on their insurance company and how their policy is written.

What Types of Legal Advice Can Be Accessed With Legal Expense Insurance?

When it comes to the exact type and amount of legal advice they can expect to have access to with legal expense insurance, Ontario business owners should note that there's a possibility those factors could vary according to their insurance company. That being said, most legal expense insurance policies offer unlimited legal advice over the telephone for any legal issue pertaining to your business. That includes, but is not limited to, the following:

• Small claims issues
• Incorporation
• Employment matters
• Bankruptcy
• Equipment and tool leasing
• Landlord or tenant disputes
• Recovery from bad debts
• Customer, client or consumer complaints
• Problems with vendors
• Compliance with government directives
• Permits and licenses
• Harassment from creditors
• Joint ventures
• Tax audits and appeals
• Civil suits
• Workers Compensation
• Defence against some types of criminal proceedings
• Contractual issues, including verbal contracts
• Municipal zoning issues

How often have you wished you could call a qualified lawyer or qualified person and have them explain something to you or give you their professional opinion on handling a given situation? Legal expense insurance provides you with that luxury at no extra cost, and the best part is that it's unnecessary to file a claim to get legal advice over the telephone. That means you can get the help you need from a licensed attorney quickly and easily without making a mark on your insurance history.

Do I Already Have Legal Expense Coverage on My Business Insurance Policy?

Legal expense insurance is not part of a standard commercial insurance policy. It can be a standalone insurance contract /product, but it is typically added to an existing policy for business insurance. That being said, you likely already have coverage on your policy for some types of legal costs—for example, if you were sued because you or your employees allegedly caused third-party bodily injury or third-party property damage, the legal costs of that litigation would be covered by the commercial general liability (CGL) portion of your business insurance policy, up to the coverage limits on your policy.

But you may encounter many legal expenses that must be covered by your standard business insurance or only partially covered, leaving you to pay out of pocket for the remainder. Your legal expense insurance coverage can fill in those gaps to offer more comprehensive coverage that will protect your business from the financial setbacks that can result from litigation. It's also essential to remember the legal advice aspect of legal expense insurance, which doesn't come with any other type of insurance coverage and is a massive benefit to any business owner.

How Much Does Legal Expense Insurance Cost?

The exact cost of legal expense insurance varies from company to company. It can depend on other factors as well. Still, it's generally a very affordable addition to your business insurance policy, especially considering all the benefits of legal expense insurance. Ontario business owners should expect to pay somewhere in the ballpark of $200 per year for legal expense insurance, which is a drop in the bucket compared to the eye-watering costs of legal services and the expenses that can result from litigation.

What Are Some Examples of Using Legal Expense Insurance?

Sometimes it's easier to understand insurance coverages such as legal expense insurance when you hear a few examples of how the coverage may apply in your business life. Here are a few examples of situations where business owners can benefit from legal expense insurance:

• Your business taxes are audited, and the results differ from what you expected. Many contested deductions and commercial expenses leave you owing tens of thousands of dollars to the Canada Revenue Agency. Legal expense insurance provides the coverage you need to hire a tax attorney who guides you through the appeal process and saves you a significant portion of the audited tax amount.
• You find it necessary to fire an employee, but they sue you for wrongful termination, and you're forced to appear in court. Your legal expense insurance provider appoints an employment lawyer who initiates a mediation process in an attempt to settle without going to court and is successful, saving you thousands of dollars in legal fees and settlement costs.
• Your company provides a service to another company, but they are not happy with the results for reasons beyond your control and refuse to pay the amount you're owed. You call the legal helpline for advice, and they assign an attorney who can recover four-fifths of the amount owed—and you don't have to pay any legal fees.

Where Can I Get a Quote for Legal Expense Insurance in Ontario?

When they need legal expense insurance, Ontario business owners can get the right coverage by contacting the friendly brokers at Morison Insurance. We work for you, not for insurance companies, so you can trust us to always keep your business's best interests in mind and work tirelessly to find the right options for your business coverage, including legal expense insurance. We always strive to deliver outstanding customer service and complete insurance packages for your business or personal life. Give our knowledgeable Morison Insurance brokers a call at 1-800-463-8074 or start a legal expense insurance quote today, to find out more about what we can do to help protect you and your business from unexpected costs and financial setbacks.