Toll Free: 1-800-310-4447

Lawsuits Cost


We are in a time where anyone can sue anyone for anything. Can you really think that risk management is optional and not at all necessary?

Once a legal claim is made it is up to the courts to decide if it has any merit. If the decision is that it has no merit, the case is thrown out. But when this case is thrown out there are still costs that are incurred. Yes, the costs are less than if it were allowed to proceed but the costs are still substantial.

It is difficult to place a dollar value on liability losses and the overall impact to your business. The physical property has an absolute dollar value. What will a liability claim cost? Costs include legal counsel, court costs, maybe an out of court settlement to end the suit. Other costs are time to collect evidence and documents, find witnesses, review written correspondence, develop defence strategies, attend hearings and to appear in court. What about reputation costs?

Court awards are also on the rise. One statistic suggests in the last 20 years injury awards have doubled. Another states that from 2003 to 2004 there was a 40% increase.

We do not have to look far to find numerous court settlements of $10 to $13 Million. Yes some will be appealed but the point is still made.

Another exposure that few are aware of is that if one defendant is unable to pay the shares of damages allotted to them, the other defendant(s) are responsible for the entire loss.

A good risk management program starts with protecting the physical assets and also takes steps to prevent injury to others. Preventative measures must include statutory compliance, lawful conduct, fulfilling contractual obligations and conducting business in a prudent manner. Procedures must be written and followed consistently across the organization. Written documents to verify the procedures are being followed are also necessary.

These associated costs of program implementation  and maintenance are an investment in the prevention of future liability claims. As stated above, litigation is expensive; for every legal action that is prevented or dismissed, capital is retained by the organization.

Be sure to seek advice and purchase insurance from an insurance broker who understands your business!