Dealing with an increasingly litigious world is costly

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What do you do if the contractor you hired to do some work in your service department doesn’t do what they’re supposed to? What if that car jockey you fired for damaging cars decides to sue your dealership for wrongful dismissal and claims severance pay? What do you do if the Canada Revenue Agency claims your dealership owes back taxes?

DAS Canada says it has the answer: legal insurance.

It’s not out of line for lawyers to charge $350 an hour to represent you or your dealership, says DAS. A two-day civil trial can cost anywhere from over $26,000 to over $62,000. And then there are court costs should the presiding judge award them to the other party.

Scott Crone is DAS Canada’s regional sales manager for central Canada. Crone says it cost the dealer $10,000 in legal fees to defend that car jockey’s wrongful dismissal claim even though the dealer had plenty of proof the employee meant to damage those cars.

“If the dealer has to pay $10,000 in legal fees to prove they’re in the right, DAS will cover this,” he insists. “We supply a law firm from day 1. We don’t reimburse the dealer for legal expenses; we pay them from day 1.”

He then goes on to list some of the areas where coverage is available: employment disputes (defense only); property protection (plaintiff only); tax protection (defense only); statutory license protection.

He explains what DAS means by statutory license protection.

“Depending on the jurisdiction in Canada, a dealership may require a license to operate the business, the autobody, or the garage components. If for whatever reason the dealership found itself with a suspended license, DAS would appoint a lawyer to intervene and would appeal to have the license reinstated in an expeditious manner.”  

The insurance company picks the lawyer.

“We know from our experience in Europe that when our panel law firms are used, the success rate is greater.  Lawyers are assigned by area of expertise,” he says.

DAS Canada is a subsidiary of DAS Group. Based in Germany, it has been specializing in legal insurance since 1928 and offers legal insurance in 18 countries.

All policyholders get a bonus: a free telephone legal advice hotline. Policyholders can call and get advice on a variety of legal issues, including those not covered by the policy such as partnership agreements.

“It’s like having a lawyer on retainer all the time,” he says.

Crone goes on to emphasize that legal insurance transfers the cost of legal expenses to the insurance side of the ledger and minimizes the owner's exposure.  

“This not only makes it easier to budget for the business, but it should free up working capital.”

DAS Legal Protection Insurance is available in all provinces and territories for used-car dealers as well as new-car dealers.

“If you sell a car, we cover you!” Crone says.

For more information, contact your insurance broker.