Demystifying Legal Expense Insurance January 2014
2 Speakers: Diane Bélanger, LL. B., FBA Solutions President FBA Solutions president and co-founder since 1998, member of Barreau du Québec since 1989, Me Diane Bélanger introduced in 1992 the first legal insurance programs in Canada. Through her involvement with many insurance companies in developing legal protection programs, she has acquired a strong expertise in the field. She has contributed to the ever growing awareness of legal insurance and the interaction between the Insurance industry, the legal community and the public. She also acts as a consultant, risk manager and third-party administrator for her clients. Diane entered the profession as a lawyer in private practice in a major law firm. Mandates she was assigned to were almost exclusively related to insurance law. Diane is an active member of the Comité consultatif sur l assurance juridique of the Barreau du Québec since its creation and is also a member of the Board of Directors of the Corporation de Service du Barreau du Québec s Board of Administrators. In 2012, her valued expertise led her to be part of the Legal Insurance Expert Committee created by the Quebec Justice Ministry.
3 Speakers: Scott Crone DAS Canada Regional Sales Manager, Ontario Scott has worked in the insurance industry since 1998. Scott began his insurance career at Allstate Insurance selling auto, home and life insurance. Achieving recognition for sales success, Scott was promoted to Sales Training Manager, and later to Market Sales Management. Scott enjoys managing and mobilizing teams and resources to achieve objectives and success. Scott joined DAS in January of 2010. Scott received his BA from York University and holds his Level II Life license.
Agenda Brief history of Legal Expense Insurance What is Legal Expense Insurance Why Legal Expense Insurance Legal Expense Insurance Guarantee Gold Terms, examples and exclusions How to make a claim Benefits for the broker Questions 4
5 Brief history of Legal Expense Insurance Originally introduced to the European market in the late 1800 s Coverage is well known in Europe for example 40% of German households are covered by legal expense insurance First introduced in Canada in 1992
6 What is Legal Expense Insurance? Insurance that covers the risk of having a Accident Legal Provide the Insured with support and financial assistance that will enable them to find an amicable or judicial solution to legal disputes Pay the Insured s necessary legal fees to solve an unexpected legal problem.
Why Legal Expense Insurance? Rights are lost Access to justice is very expensive (average hourly rate for an experienced lawyer, depending on the province, is more than $300) Outcome of a legal dispute is uncertain and risky Whole process is stressful End cost always unclear Demystify the legal system and laws Consumers anticipate that they could use legal help 2 to 3 times a year, and often do not know who to contact to have some answers 7
Legal expense insurance - GUARANTEE GOLD Who is the Insured? As the coverage is an endorsement the Insured definition is the same as the one written in Chapter 1 of the main contract. Insured means the person(s) named as Insured on the Residential Insurance Policy Declarations page and, while living in the same household, the following persons: - His or her husband or wife or same sex partner; - The relatives of either; and - Any person under 21 in their care. Husband and wife includes a man and a woman who are living together as husband and wife and have so lived together continuously for a period of 3 years or, if a child was born of their union, for a period of 1 year. Same sex partner includes either of two persons of the same sex who are living together and have so lived together continuously for a period of 3 years or, if they are the natural or adoptive parents of a child, for a period of 1 year. In addition, a member of your family who is a student enrolled in and actually attends a school, college or university and is dependent on the Named Insured or his or her spouse for support and maintenance is also insured even if temporarily residing away from the principal residence.
Legal expense insurance - GUARANTEE GOLD Part I : Telephone Legal Assistance Unlimited access to a toll-free line, Monday through Friday from 8 AM to 8 PM, except on holidays (in case of an emergency, access 24/7 to a lawyer) Information is given by qualified lawyers All legal fields are covered with regards to the insured private life No limit to the number of calls or length of calls
Legal expense insurance - GUARANTEE GOLD Unlimited legal consultation by phone No reading of documents, No writing of letters Summary of the legal consultation by phone is kept in the insured s file In general, insured may speak to the same lawyer A phone call is not considered as a claim 10
11 Legal expense insurance - GUARANTEE GOLD Part II : Legal insurance Limits of covered legal fees: $25 000 per case, $125 000 per year A claim has no impact on the annual premium for a home insurance policy.
Legal expense insurance - GUARANTEE GOLD It is insurance for specific risks: Specific disputes covered: Employment disputes Contract disputes Bodily injury Property protection Tax protection Legal defence (Criminal & Penal) Driver s licence protection (provided the insured has a valid automobile insurance policy with The Guarantee) Disputes which are not within the scope of the above-mentioned disputes are excluded.
13 Implementation The dispute must have an economic value Only risks for legal accidents may be covered All legal accidents could not be covered, The Guarantee had to make CHOICES Important to do risk management (prevent and solve)
Implementation The Guarantee chose to join forces with experts in the field of legal insurance: FBA solutions for the administration of insurance policies: - Assistance - Claims management DAS Canada part of the DAS group, global leader in legal expense insurance as the reinsurer The Guarantee has also selected and negotiated fees for a group of experienced lawyers available to the insured in case of a claim. - However, insured must contact a lawyer from the legal assistance service to report a dispute before instructing counsel - The insured can be represented by counsel of their own choosing 14
15 Implementation The Guarantee will pay for covered disputes: Lawyer s fees Disbursements and other fees as court filing fees, expert s fees, bailiff fees, etc. Costs awarded to the opposing party if insured must pay them by virtue of a decision of the Court or with the approval of The Guarantee The insured s salary for the time he or she is obliged to spend on the file
Legal expense insurance - GUARANTEE GOLD Employment disputes Insured s legal costs to pursue or defend his/her legal rights recognized by law in: A dispute related to his/her contract of employment or future employment. Examples: Insured is victim of harassment at work despite complaints made to his/her supervisor Insured considers that his/her termination of employment is unjustified 16
Implementing rules, exclusions & practical case studies Employment disputes include: Wrongful dismissal Severance pay Employment contract or binding offer of work, etc. Exclusions: Employer s disciplinary hearings or internal grievance procedures Claim relating solely to death, illness or bodily injury 17
18 Legal expense insurance GUARANTEE GOLD Coverage Contract disputes Insured s legal costs to pursue or defend his/her legal rights recognized by law in: A dispute relating to an agreement or an alleged agreement which the insured has entered into for: Purchase, rental, lease, or selling goods (including an automobile, provided that the insured has a valid automobile insurance policy with The Guarantee) Obtaining services
19 Implementing rules, exclusions & practical case studies Contract disputes Examples: Purchase of a boat under false representations Contractor that did not do the work according to professional standards and practices Dispute with a Car Dealer on the car s value within the scope of the lease* Exclusions: Amount in dispute is less than $1,000 Claims relating to a contract regarding an insured s trade, profession, occupation, employment or any business venture Claims relating to a dispute arising from any loan, mortgage, pension, investment, borrowing or any other financial product, lease of land or buildings, etc. Claim relating to contracts with The Guarantee * Insured must have an automobile insurance with The Guarantee
20 Legal expense insurance - GUARANTEE GOLD Coverage Bodily injury Insured s legal costs to pursue* their legal rights recognized by law: Following a specific or sudden accident which causes his/her death, sickness or bodily injury. *only where Insured is the plaintiff
21 Implementing rules, exclusions and practical case studies Bodily injury cont. Examples: Insured slips and falls on a wet floor of a restaurant. As a result, insured has bodily injuries and is unable to return to work. Insured s child has been bitten by a dog. Exclusions: Disputes with a provincial worker s compensation board Claim for injury involving the use or the ownership of a motor vehicle Psychological injury or mental illness not related to the bodily injury Surgical, clinical or medical negligence
Legal expense insurance - GUARANTEE GOLD Coverage Property protection Insured s legal costs to pursue* their legal rights recognized by law in a dispute relating to: Physical property which they own, or is legally responsible for, following an event that causes: Physical damage to such property, A legal nuisance or A trespass; *Covered only where Insured is the plaintiff
23 Implementing rules, exclusions & practical case studies Property protection cont. Examples: Neighbour has built a garage encroaching on Insured s land and blocking his view to the lake Trespass Exclusions: Amount in dispute is less than $2,500 Claims relating to a motor vehicle Claims relating to mining and landslide
24 Legal expense insurance - GUARANTEE GOLD Coverage Tax protection Insured s legal costs in respect of a tax appeal or a tax audit relating to personal tax affairs; Provided that the insured had taken reasonable care to ensure that all returns are complete and correct and submitted within the statutory time limits allowed.
25 Implementing rules, exclusions & practical case studies Tax protection Examples: Canada Revenue Agency informs Insured that they have selected his/her file for audit Insured wants to contest and file an appeal regarding a Notice of assessment Exclusions: For a tax audit, the first $500 Claims arising from the tax affairs of a corporation, or Insured s activities if he is self-employed Claims arising from a tax avoidance Criminal activities
Legal expense insurance - GUARANTEE GOLD Coverage Legal Defence (Criminal & Penal) Insured s legal costs to defend their legal rights recognized by law in relation to their being prosecuted for: A highway traffic act or motor vehicle offence*. An alleged criminal offence arising from his/her work as an employee *Provided Insured has a valid automobile insurance policy with The Guarantee
27 Implementing rules, exclusions and practical case studies Legal Defence (Criminal and Penal) Examples: Insured is a pharmacist and is charged with theft of drugs Offence for speeding Exclusions: Offence relating to an alleged use of alcohol or drugs or impaired driving Offence for dangerous driving (racing and rallying) Parking or obstruction offence Automated Traffic Enforcement Camera Offences
28 Legal expense insurance - GUARANTEE GOLD Coverage Driver s licence protection Insured s legal costs to defend his/her legal rights recognized by law in relation to: Protecting his/her driver s licence from being revoked or suspended following an event arising in connection with the ownership, use or operation of an automobile *. * Provided Insured has a valid automobile insurance policy with The Guarantee
Implementing rules, exclusions & practical case studies Driver s licence protection cont. Examples: Offence leading to loss of driver's permit Dispute relating to a learner s permit Exclusions: Offence for impaired driving or use of alcohol or drugs Offence for dangerous driving (racing or rallying)
30 Implementing rules, exclusions & practical case studies Other Exclusions: Class Action Proceedings Proceedings outside of Canada Disputes with The Guarantee Fraudulent claims Defamation Other criteria for coverage: Legal costs incurred before reporting the claim to The Guarantee Dispute must have reasonable chances of success Cooperation of Insured at all times (ex: when negotiating a settlement)
Submitting a claim Where there is a dispute: Legal information helpline/fba will evaluate the coverage and reasonable prospects of the case. If submission of the a claim is valid, Legal information helpline/fba will refer Insured to a qualified group of lawyers in the specific area of law. Insured can also retain the services of his/her own counsel if he/she prefers to do so. Legal information helpline/fba will follow up on the file but Insured and Insured s lawyer will determine strategies to be taken in the file. The Guarantee will pay involved legal fees directly to the lawyer. 31
32 Benefits for the broker / The Guarantee Secure the loyalty of your customers Give an added-value to the principal insurance offered Offer peace of mind at no additional cost Provide a superior service in preventing problems that may occur for your insured Provide an assistance to your insured when they need it most
Questions CONTACT US Submitting a claim and legal advice: 1-888-998-1872 Questions and assistance: 1-866-507-2326 33
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