November 8, 2012
Is legal expense insurance ideal for construction companies?
In an industry where contractors hire sub-contractors who work with sub-sub-contractors, the climate is ripe for defaults on payments.
With huge contracts in play and overlapping projects at various stages of development, high legal costs are deterring many companies from pursuing money they are owed. This means that money is frequently left on the table. And these forfeitures can be significant; $10K here, $50K there, can really add up.
The average hourly rate for a lawyer in Ontario is around $360 per hour. It is no wonder, then, that construction companies are reluctant to go after money they are owed, as many consider the extensive costs of legal remedies to be akin to throwing good money after bad. Fortunately, this practice is beginning to change. With the introduction of legal expense insurance to the Canadian market, policies for businesses are helping companies ensure they are no longer forfeiting money to which they are rightly entitled.
Complete Mechanical Contractors Ltd. and Capital Drywall Ltd. are two Ontario companies who’ve jumped on legal expense insurance. Beyond ensuring they are able to pursue outstanding monies without incurring huge legal fees; their policies with legal expense insurance provider DAS Canada include unlimited access to legal advice, enabling them to mitigate issues before they require escalation, saving both time and money for all parties.
Let’s say, for example, that a policy holder who owns a general contracting business completes 50 per cent of a job contract. Said contract, signed by the contractor, indicated that a payment of $10,000 would be made when the work was half complete.
Should the property owner renege on the contract and refuse to make the interim payment, the contractor may decide to place a lien on the property. In such an instance, a legal expense insurance policy would cover the legal costs associated with the debt recovery. Without this coverage, the contractor may be unable to afford the administrative costs of placing the lien, much less pursuing it in the legal realm. Legal expense insurance enables the policy holders to pursue payments they are rightly owed.
Legal expense insurance now makes it affordable for companies to pursue legal remedies. Additionally, DAS Canada’s access to its legal advice hotline enables policyholders to call and speak directly with lawyers who are experts in the legal field required.
This access means possibly preventing a legal dispute before it starts, saving time, money and headaches for all parties involved.
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 firstname.lastname@example.org. Email any comments to email@example.com
This next installment of the Legal Expense Insurance series appears Thursday, Nov. 15.
|MOST POPULAR STORIES|
|TODAY’S TOP CONSTRUCTION PROJECTS|
These projects have been selected from 479 projects with a total value of $1,224,678,004 that Reed Construction Data Building Reports reported on Wednesday.
$31,000,000 Richmond Hill ON Negotiated
$30,000,000 Brampton ON Tenders
$30,000,000 Mississauga ON Negotiated
- Having a blast on the job — demo with finesse
- Does a roadmap to a sustainable future exist?
- Work complete on South Kent Wind project
- Draft standard for snow loads on buildings in northern Canada open for feedback
- Community murals brighten up construction hoarding on TTC projects
- Protecting endangered species a focus on Highway 15 work
- Intricate demolition saves venerable newspaper building façade
- London Roundhouse project takes selective demolition to high art
- London hospital tear down not your average demo
- Strategic demolition repurposes Bowater Mersey paper plant
- Barn razing: demolition of Charlottetown racehorse stables
- Incarceration gives way to innovation at Bridgepoint
- Breaking good: National Demolition Association updates safety manual
- Droppings responsible for respiratory illness at Quebec demolition site
- Innovative storm water solution under Denison Road
- Journal of Commerce Preview for the week of April 28th, 2014
- Merit Contractors Association president announces retirement
- Truss Lift
- B.C. government reverses sweet gas deregulation
- CCA looking to engage Aboriginal communities with new taskforce
- Pembina Pipelines building regional headquarters in Alberta
- Biomaterials growing on construction
- Manitoba town is a design showcase
- Saskatchewan wind project moves forward
- Suncor worker death investigated
- Olympic builders return to the job