CLEI for Strata / Condominium Corporations
After the introduction of the Commercial Legal Expense product it became evident that there was a requirement for a slightly different product to meet the needs of Condominium and Strata Corporations.
Legal Expense Insurance for Strata / Condominium Corporations
These corporations are unique by virtue of having specific legislation governing their activities. A product was created to provide protection against specified perils not generally covered by other insurance policies.
Many Condominium Corporations only have volunteer staff, directors and officers and no employees. Some use Property Management companies to oversee the operations of the properties/units. Very few have any access to cost effective legal services.
The individuals insured by the policy include directors, officers, council members or similar office holders who are appointed or elected pursuant to the Condominium legislation. Generally it also extends to provide protection to the designated executive of the Property Management company.
Summary of Coverage
There are generally 6 Insuring Clauses: Civil Defence, Criminal Defence, Personal Injury, Property Disputes, Defence of Disputes with Owners and Contract Disputes. Other Insuring Clauses, such as Employment Disputes, may also be available to meet specific requirements.
1.1 Civil Defence
Defence against failure or alleged failure of compliance with legal requirements under privacy legislation and anti-spam legislation; defence of a claim against the insured in their capacity as trustee of a pension plan; appeal against the imposition of a statutory notice which adversely affects the business.
1.2 Criminal Defence
Defence against criminal charges( e.g. Criminal Code(Canada), Occupational Health and Safety).
1.3 Personal Injury
Pursuit of claims for compensation relating to death or bodily injury sustained away from the workplace or within an owner’s unit but while engaged in business activities.
1.4 Property Disputes
Pursuit or defence of disputes relating to freehold/leasehold property including disputes following physical damage by a third party to that property (e.g, landlord and tenant disputes, nuisance and trespass).
1.5 Defence of Disputes with Owners and/or Renters
Defence of allegations of failure or alleged failure by the corporation to comply with its by-laws and/or regulations.
1.6 Contract Disputes
Pursuit or defence of contractual disputes relating to the sale, purchase, lease or rental of goods or the provision of services (e.g. disputes with customers/suppliers).
1.7 Employment Disputes (Optional)
Defence of any dispute with an employee (e.g defence against wrongful dismissal charges, discrimination).
• Unlimited toll free telephone legal advisory service for the insured regarding any commercial matter.
Claim Examples
Civil – Privacy issue: The corporation and the managing Director are sued by one of the unit owners for allegedly failing to comply with privacy legislation. Whether they are found liable or not the insurance will respond to the defence including helping to mitigate the fine, sentence etc.
Civil Defence – Appeal against Statutory Notice: The city imposes a statutory notice restricting the use of a portion of the common area for parking purposes. The insurance provides for a legal opinion on the merits of appealing such decision. It there are reasonable prospects of success the policy responds to enable an appeal against the imposition of the notice.
Criminal: The corporation is investigated by health and safety authorities concerning a number of perceived breaches of the regulations in relation to the common areas used by all the unit owners. Legal assistance is provided to assist in refuting the breaches.
Property – nuisance/trespass: A neighbour is interfering with the operations of the corporation by continually parking his vehicle on the property to the detriment of the owners whose parking spots are used. Despite reasonable attempts to try to resolve this issue it becomes necessary to seek legal intervention.
Council and Owner Dispute: The corporation was involved in a dispute regarding flooring installed in a unit by an owner in breach of the by-laws. The corporation served the owner with an order to remedy the situation. The owner challenged the by-law in the courts. Representation was provided to defend the action and legal costs for the corporation were in excess of $12,000.
Contract – dispute with contractor: Landscaping work undertaken by a company later resulted in some landslide and water collection. The company refused to remedy the problem and the corporation received legal representation to enforce the warranty terms.
Employment: The corporation employs an assistant whose performance and attendance has become unsatisfactory due in some part to personal problems. After discussions and several letters trying to resolve the matter the corporation determines it is necessary to terminate the employment. The Insured consults with the Telephone Legal Advisory service and receives advice on the correct procedure to do this. The employee claims wrongful termination and the corporation is provided with legal representation to defend the action.
ATRENS-COUNSEL (Ontario)
Atrens-Counsel Insurance Brokers, part of Arthur J Gallagher Canada Limited
200–7111 Syntex Drive
Mississauga, ON
L5N 8C3
P: 877-627-6222
Roz Dickett, CIP, CRM
Acera Insurance Services Ltd. (Canada)
700–2025 Willingdon Avenue
Burnaby, BC
V5C 0J3
P: 604-484-0203
TF: 800-263-3313