The paperwork that underpins a business’s ability to open its doors, and sell its goods and services to clients can also result in a serious stumbling block that can rack up thousands of dollars in legal costs. What’s more is that no business is immune to the issues that can come from the licences they hold.
“It is at the discretion of each local government to determine which business operations would require a statutory licence to transact business within a particular jurisdiction. This statutory licence is tied to a governing body that is then responsible to ensure each business operates within the mandated jurisdictional regulations,” explained Katherine Ferrante, vice president of sales and business development at ARAG Canada. “The rules vary across Canada, but virtually every business from a hotdog cart on Main Street, a plumber, a butcher, or a candlestick maker may require a statutory licence to open business doors in their respective locale.”
For example, salons and restaurants fall under regulations that are legislated and administered by the Ministry of Health or the health department for their particular jurisdiction. If a health inspector goes to one of these businesses and determines that they are in contravention of the regulations, they then have the authority to suspend, alter the terms of, and/or revoke the respective operating licence, explained Ferrante.
An inspector could find that the footbaths at a nail salon are not being appropriately cleaned, which presents a risk of bacterial transfer from one client to the next. Alternatively, an inspector could arrive at a restaurant and witness improper food handling practices that lead to cross-contamination. That business owner may be given a set number of days to improve or fix the issue, along with perhaps paying a fine.
If the statutory licence violation is serious enough, the regulator may suspend, alter or revoke the licence – this is the point where an ARAG policyholder may have grounds to appeal against the decision imposed by the relevant authority. Just like legal expense insurance can assist business owners with issues around employees or facing audits from the Canada Revenue Agency, it can also help businesses if their licence is in jeopardy.
“This falls under our statutory licence appeals cover,” said Ferrante. “We will appoint the necessary legal specialist(s) to work with the insured to appeal against a decision by the relevant authority to suspend, alter the terms of, revoke or refuse to renew, or cancel an insured’s statutory or operating licence.”
In these instances, the business owner can contact ARAG’s unlimited telephone advice line and speak with intake lawyers, who would then arrange to open a claim.
When you consider that the legal costs to resolve a licensing issue can range between $5,000 and $10,000, alongside the tight margins that small and medium-sized business already operate within, brokers can advise their clients to have a legal expense insurance policy in place to ease this financial burden.
Let us carry the burden, so you can live your life.