Covers legal assistance from helplines (no claim required) to full representation. Both defendant and plaintiff. Covered costs include attorney fees, court fees, witness and expert expenses, translation costs and adverse costs. Can be standalone or an add-on to an existing policy.
Before-the-Event (BTE) Coverage: Already in place before a litigious situation arises; protects against future events.
After-the-Event (ATE) Coverage: Purchased after an incident has already occurred; covers litigation costs from that event. Bodily injury cases are a typical ATE scenario.
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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.
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:
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:
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.
What is the difference between BTE and ATE coverage?
Before-the-Event (BTE) coverage is in place before a legal situation arises and is the standard, recommended approach. After-the-Event (ATE) coverage is purchased after an incident has already occurred and is intended for businesses without BTE already in place.
What is NOT covered by Legal Expense Insurance?
Insurance claims status inquiries; claims determination; draft letters; contract or document review; case-specific research. Some exclusions may vary by insurer.
How does Legal Expense Insurance differ from Commercial General Liability?
CGL covers bodily injury and property damage litigation. LEI fills the gaps, employment, contract, tax and other legal matters not covered by CGL. LEI also provides the unique helpline benefit unavailable in any other policy type.
Are there real-world examples of how Legal Expense Insurance helps?
Yes.
Example 1 Tax audit: a CRA dispute where a tax attorney through LEI saves a significant portion of the audited amount through appeal.
Example 2 Wrongful termination lawsuit: an employment lawyer initiates mediation, settles without court, and saves thousands.
Example 3 Unpaid invoice: a legal helpline assigns an attorney who recovers four-fifths of the owed amount, with no legal fees paid.
