In Canada, an overlooked class of insurance is legal expenses insurance (or legal protection insurance in some countries), which can provide coverage for legal costs associated with disputes and issues not covered by the typical and common commercial policies. Legal expenses insurance is a natural complement to the business insurance coverage your clients now have.
Legal costs is very expensive in Canada. Some business can not afford it.
What’s Covered in Legal Expenses Insurance Policy?
Coverage is afforded to the business and its officers, directors, managers, employees and if necessary, its volunteers.
The usual perils or risks a legal expenses insurance policy provides coverage for include claims that allege breach of contract, defence of criminal and qussi-criminal charges, employment disputes, business licence protection, property protection and tax audits.
- Contract Claims
- Employment Disputes
- Legal Defence
- Business Licenses
- Property Protection
- Tax Protection
- Legal Advice
The typical business insurance package offers your clients a defence to claims brought against it by third parties claiming damages arising from negligence or property damage. However, what they do not offer is coverage for matters that arise from day to day business operations such as claims for breach of contract. In addition, unlike typical liability policies that only respond to claims made against your clients, a legal expenses insurance policy can also cover the cost of claims that may be brought by your clients. A legal expenses insurance policy will enable your clients to obtain a remedy through the courts.
A legal expenses insurance policy can fill in the gaps that your business client’s typical liability insurance program unintentionally creates, issues that the typical liability insurance policies do not cover. Liability insurance does not provide plaintiff coverage and typical business insurance programs do not provide coverage for legal disputes unrelated to claims for negligence but that arise in the course of business. These are the gaps and the costs associated with these issues are the areas and costs that legal expenses insurance policies cover.