InFocus: Hospitality Insurance

Legally blond ale: the coverage that brokers use to win over nightlife clients

Legally blond ale: the coverage that brokers use to win over nightlife clients

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Simple legal matters such as wrongful dismissal claims have the potential to drain Canadian businesses of $250,000+ in legal fees and damage awards, which often forces enterprises to cease operations indefinitely. 
 
This is why it’s imperative that Canadian enterprises remain protected against costly legal action through Legal Expense Insurance (LEI).
 
The hospitality industry - nightlife entertainment in particular - is especially vulnerable to these types of claims. 
 
Zena Nucifora, senior underwriter with South Western Group Ltd., explains that legal risks are pervasive since these venues are often comprised of “transient” employees who only hold positions for a relatively short timeframe.  Moreover, since many establishments lease property from landlords and conduct most of their business transactions in cash, they are inherently exposed to a wide array of legal liabilities.
 
South Western’s LEI, however, offers a thorough, multifaceted safeguard to protect drinking establishments from these risks.
 
“The first coverage is telephone legal advisory. The bar owners are able to call a toll-free number and speak directly with a lawyer for advice and assistance on all types of matters affecting business activity,” Nucifora said.
 
 These owners are not limited to a one-time phone call, but can repeatedly seek out legal advice as issues arise, all under their policy coverage.
 
“So, if there was a case of sexual harassment, and the bar owner wanted to fire one of his or her employees, then that owner could make a phone call and have immediate access to a lawyer, who would then guide them through the steps of what to do, as well as provide clarification of financial obligations and how to produce a record of employment,” Nucifora said.
 
If a matter does go to court for adjudication, the policyholder will be covered for all legal fees up to $50,000, including the retention of an experienced lawyer.
 
This representation can be crucial.  Nucifora recently observed a case where a bar owner had been charged by police with permitting drunken behavior, which was followed by a complaint to the Alcohol and Gaming Commission. The owner was appointed representation, and successfully fought the claims in court – all part of the policy premium.
 
Another unique feature of this offering is that it provides coverage for tax disputes, and allows owners to receive expert advice on any tax-related issues.
 
“Our policies are slightly different than some of our competition because it helps bar owners with their taxes, since many have issues with HST and income tax,” Nucifora said.  “Because they are primarily dealing with cash sales, it’s important to make sure they’re paying the appropriate HST.”
 
These are the highlights of the policy, but it is comprehensive and thus covers:
  • Employment disputes
  • Criminal and/or statutory defense
  • Property disputes
  • Personal injury pursuit 
  • Tax disputes
Each has a limit of $50,000, adding up to an aggregate of $250,000 of potential coverage.
 
As the designer of this policy, and someone who helped usher LEI into the marketplace when it unknown to Canadians, Nucifora is passionate about educating brokers about the invaluable benefits of these policies. 
 
“Brokers often use the benefit to help get a deal with clients,” said Nucifora.  “I had a broker last week whose client didn’t realize he had coverage on both locations, but when he found out, he was thrilled.”
 
“It does make a difference on a deal.  It’s not just a frill, but has a lot of power to it,” she said.
 

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South Western Insurance Group Ltd. (SWG) is a Wholesale Insurance Intermediary / Managing General Agent offering a broad range of insurance solutions for specialty, niche, program and hard-to-place business. Since 1961 we have proudly provided underwriting expertise to independent insurance brokers across Canada.
We have earned a reputation for excellence in underwriting, risk management and customer service. We are continuously perfecting the way we do business and are satisfied with nothing less than the absolute highest level of service.
Using electronic delivery systems and paperless file management we have been able to significantly reduce document delivery time as well as more quickly respond to broker needs.
This gives brokers the ability to service their clients faster and increase their business.