to main content to contact page
In August of 2022, we asked small business owners across Canada if they had dealt with any type of legal dispute in the last three years. Our main objective was to understand the prevalence of legal issues within the Canadian small business landscape and gain insight into how these legal issues are managed.
For context, we surveyed the same number of Canadian small business owners and asked them the exact same question back in 2015. At the time, only 3 out of 10 had said they had dealt with legal disputes.

That is a staggering 230% increase in legal disputes in only 7 years.

While broad economic uncertainty continues to be a leading concern for small businesses across the country, small business owners' perception of legal risk has changed.
Running a small business is a permanent juggling act.
It's important to talk about legal risk, not only because of its clear prevalence within the Canadian small business landscape, but also because the financial, mental and time impacts it has on small businesses are alarmingly significant.
53% of small business owners said that legal disputes had a strong or moderate financial impact on their businesses. 70% also said that they spent a lot of or a moderate amount of time dealing with legal issues, while 73% said that they experienced a lot of or a moderate amount of mental stress on a personal level while dealing with legal issues.
There's interest, but is there awareness?
The majority of small business owners are spending, on average, anywhere between $5,000 to $50,000 in legal fees and other legal expenditures. We asked them how likely they would be to purchase an insurance policy that covers legal expenses if it cost their business approximately $2,000 per year (an overstated cost as the average cost of a commercial LEI policy in Canada is $275 per year*). 56% said they would be very or somewhat likely to purchase such a policy.

* Our study showed that the revenue bands of 75% of the small businesses we surveyed, both self-employed and those who have between 1 to 50 employees was anywhere up to $2,000,000. The average mandatory rating of an LEI policy (including contract disputes) for revenue bands up to $2,000,000 is $275.

There are insurance options available that help mitigate legal costs. As an industry, we could do better to ensure small businesses are aware of these options and as prudent risk managers ensure this protection is included in their insurance portfolios.

We believe in our mission to provide access to justice to every Canadian, and we stand by our efforts to ensure legal risks are well managed.

Research Toolkit