November 15, 2012

Legal expense insurance a constructive tool to mitigate unexpected legal costs

ROBERT CHIARANTANO

columnist

By their very nature, construction sites pose an increased risk of workplace accidents, occasionally causing injury or death.

Three recent occurrences underscore this truth: The media recently reported a fatal accident involving a worker pinned underneath a truck while on a construction site in Markham, Ont.

In June of this year, a roofer fell to his death while on a residential construction site in Ormsby, Ont. Even more recently, a worker in Toronto died after falling from scaffolding at the end of August.

These are three tragic yet poignant examples of the physical dangers inherent in construction work.

It was for reasons like these that the Ontario WSIB was created, to establish standards ensuring the safest workplaces possible for employees.

Federal Bill C-45 was introduced in 2004 to add additional workplace regulations, including amendments to the criminal code allowing for employers to be held criminally responsible in the event of an accident causing an employee’s injury or death.

If such accidents are thought to have been preventable, beyond facing enormous fines and loss of business, employers could also face a criminal trial. (Although Bill C-45 has already been in effect for over eight years, it is still very much misunderstood, and there appears to be very little awareness around the implications for businesses, owners or employees.)

It is both the legal, and moral, responsibility of all employers to strictly adhere to the WSIB standards and Ministry of Labour regulations. Sadly though, sometimes accidents still happen.

Tribrik Management Ltd. understands this. Although so far the masonry contractor from Concord, Ont. has faced few of its own legal challenges, they’ve seen colleagues confronted with enormous legal bills resulting from the myriad pitfalls that construction companies and suppliers may face.

The potential for such pitfalls is what prompted Tribrik to find out if there was any product in the marketplace that would mitigate this risk.

Legal expense insurance is relatively new to Canada, however widely sold throughout Europe.

As a complementary add-on to typical business insurance, such a policy entitles clients to unlimited access to legal advice on all matters pertaining to their business, and a significant share of their legal fees covered in the event of legal action against the company.

The average hourly rate for a lawyer in Canada today is $360, with rates in Ontario running even higher; an on-site accident causing injury could therefore result in tens of thousands of dollars in legal fees.

Even if an employer is ultimately cleared, the cost of responding to a Ministry investigation could cost anywhere from $50,000 to $200,000.

A legal expense insurance policy would cover such costs.

Additionally, DAS Canada, which offers these policies, provides 24/7 access to its legal advice hotline, which enables policyholders to call and speak directly with lawyers who are experts in the legal field required.

By being able to simply pick up the phone — at any time — and speak with a qualified lawyer, employers will be able to better ensure they fully know and understand their legal rights and responsibilities, contributing to increasingly safer workplaces going forward.

Robert Chiarantano is a Senior Account Executive with RDA Insurance in Vaughan, Ont. with over 20 years of experience.

To speak with Robert contact him at 1-800-479-6450 or robertc@rdainsurance.com.

Email any comments to editor@dailycommercialnews.com.

This next installment of the Legal Expense Insurance series appears Thursday, Nov. 22.

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