“Spicegate” shows how business owners can end up in legal hot water
TORONTO—When Naveen Polapady, owner of Maroli Indian restaurant in Toronto threw spice in the face of an attempted robber outside his restaurant last summer, he was charged with assault. In an earlier case, Chinatown grocer David Chen was arrested for tying up a repeat shoplifter. This incident led to Bill C-26, legislation aimed at expanding citizens’ arrest powers.
These cases are perfect illustrations of unpredictable legal matters that restaurant and bar owners could find themselves wrapped up in at any time, says Barbara Haynes, CEO of legal expense insurance provider DAS Canada.
The spicy situation Polapady now finds himself in is the result of complex laws and regulations surrounding property protection. Polapady, like most small business owners, was unsure of the boundaries surrounding his rights to protect himself and his property.
This case is a strong example of why small business owners need legal expense insurance—so they can be better informed of their rights and limitations, and have legal support should challenges arise. Such policies provide holders with access to 24/7 legal advice, in addition to myriad other benefits, Haynes notes.
“They can call the legal advice line at any time to get advice on a broad range of issues,” Haynes says. “We can address the particular situation including current charges, provide them with a lawyer, and pay all legal and defense costs up to and including trial.”
These costs can exceed $5,000 per day. For example, David Chen’s four-day initial trial cost more than $20,000—not a cheap undertaking.
DAS Canada’s cases range from restaurants, hotels and small businesses with employee disputes, to occupational health and safety issues, taxation protection and disputes with suppliers.
In one recent case, a restaurant was charged with a bylaw infringement regarding the posting of notices regarding events. It cost $4,000 to defend them. Insurance policies provide coverage up to a limit of $200,000 on any one claim.
The costs depend on the size of the business, and can be as low as $250 per year. The average cost is $750-$1,000 per year.
“It’s not a terribly well known insurance product,” says Haynes, noting that it’s been available in Europe for 80 years. DAS is based in Munich, and started offering legal expense insurance in Canada at the end of 2010.