Companies that might not necessarily be big enough to have a budget for an in-house counsel team or full legal protection could turn to legal expense insurance to fill their needs as more choices become available in the market.
Last week, Ontario regulators approved the insurance licence of a company that caters to small and medium-sized businesses that want legal expense insurance. Federal regulators had done so earlier.
The Financial Services Commission of Ontario approved the insurance licence for the Canadian subsidiary of European legal insurance giant DAS Group, which specifically covers legal expenses for small and medium-sized companies as well as individuals and vehicle owners.
The Canadian market for legal expense insurance is underdeveloped outside of Quebec, and the entrance of DAS Legal Protection Insurance Co. Ltd. could extend legal services to small businesses and people that would otherwise not be able to access legal assistance in disputes.
Its CEO, Barbara Haynes, tells InHouse the insurance policies cover costs ranging from solving a contract dispute to bringing an expert witness to court. The company, in essence, pays to defend policyholders’ legal rights, following an unforeseen event. It also offers direct basic telephone advice in labour or contract disputes.
The company’s experience comes mainly from Europe, which also represents the majority of the $10-billion legal expense insurance global market.
“The main areas we’ve dealt with in Europe have been employment disputes and business contract issues, and we don’t expect it be any different in Canada,” says Haynes. “Companies with no in-house lawyers would be more attracted to these policies.”
Policies also cover things like legal defence, court attendance expenses, statutory licence protection, property protection, bodily injury, and tax protection.
DAS Canada says it is able to offer policies only in Ontario right now, but plans on expanding to Alberta and British Columbia in the next few months, as it is in the process of finalizing provincial licences in those two jurisdictions.
As it does elsewhere in the world, DAS will sell its policies through insurance brokers, not directly.
In addition to paying policyholders’ legal costs following a dispute, all policies provide unlimited access to a legal advice helpline, which provides business-related legal advice, including on tax issues.
DAS says it has agreements with several law firms in Ontario to ensure that policyholders get the most appropriate legal representation possible for their claim.
DAS Group has been specializing in legal insurance for the past 80 years, and Canada is the 18th country where the company has a presence, says Haynes.