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Excess Insurance

Canadian Lawyers Insurance Association Voluntary Excess Professional Liability Insurance

Firms and sole practitioners are at greater risk than ever of negligence claims that could leave lawyers personally exposed to liability. Errors and Omissions insurance is your best solution for transferring the risk of legal liability away from you and your firm. When considering excess insurance, ask yourself how will respond if you have a claim that exceeds the mandatory limit but have no coverage beyond that limit. Moreover, retiring from practice does not exempt you from the risk of liability. LIANS’ staff and the Canadian Lawyers Insurance Association are available to assist you with any questions or concerns regarding excess insurance.

Highlights in this bulletin:

  • New – additional coverage limit of $6.5M in excess of the $1M mandatory coverage
  • New – 10% discount in 2021/2022 to any firm referring a new client
  • New – 25% discount premium rate for retired lawyers
  • How CLIA differs from the commercial insurance market
  • Excess cover applies only if you have it at the time a claim is made or you become aware of an error

The Nova Scotia Barristers’ Society is a subscribing member of the Canadian Lawyers Insurance Association (CLIA). In Nova Scotia, LIANS, through CLIA, provides each Member with their mandatory Errors and Omissions (E&O) insurance with a limit of $1M per claim and a $2M annual aggregate limit.

For many lawyers, the mandatory limit may provide sufficient limits for their needs. CLIA’s

Voluntary Excess Program (VEP) provides the option of additional coverage limits of up to $9M per claim, with a $9M annual aggregate. The limits available under the VEP are $1M, $2M, $3M, $4M, $6.5M and $9M excess of $1M. Limits above $9M are available upon special request.

New this year is an additional coverage limit of $6.5M in excess of the $1M mandatory coverage. We are offering this based on requests we received last year for a coverage valued between $4M and $9M.

As the value of transactions increases over time, lawyers and law firms should consider whether they need excess insurance and if so, the adequate level of excess coverage. The defence of a large claim could quickly erode the mandatory policy limit, leaving the lawyer or law firm exposed to significant personal liability.

Matters you should consider in assessing the adequacy of your firm’s existing E&O insurance limits include:

  • the type of transactions and their potential impact on the client;
  • the size of the transaction and the frequency of large transactions;
  • whether former associates and partners currently have excess insurance that is either inadequate or excludes their past activities;
  • the time horizon of the advice, as the impact of the advice may continue to grow over time as may the potential liability; and
  • your total risk tolerance.

Why Buy Your Excess Liability Coverage from CLIA

CLIA specializes in legal liability insurance and has been providing quality, affordable protection to Canadian lawyers for over 30 years. CLIA has built long‐term and healthy relationships with reinsurance companies that allow it to deliver a cost-effective and stable program that provides a broad range of coverage and exemplary service to Canadian lawyers at competitive prices. 

CLIA’s relationship with all its Law Society Subscribers helps us understand the challenges faced by their members and we work with the Law Societies to find ways to address those challenges.

CLIA is different from typical commercial insurers in 3 key ways:

  1. CLIA is not an incorporated entity, but rather is a contractual arrangement between the Law Society members by way of a Subscribers’ Agreement;
  2. CLIA is not profit-motivated and is financially supported by its members solely through premium collected. There are no commissions charged, and all “profits” are returned to the member firms through premium credits or discounts;
  3. CLIA can tailor insurance products to meet the specific needs of its membership and ensure availability of reasonably-priced coverage, independent of conventional market cycles.

Premiums

The VEP premium varies with the amount of excess coverage purchased. You can choose the level of excess insurance based on your potential risk exposure with the total premium being based on the number of lawyers in the firm. If a firm has more than one lawyer, the excess policy must be purchased for each lawyer in the firm so that the firm as a whole has the coverage.

New this year CLIA is excited to offer a 10% discount to any firm referring a new client to us for excess coverage.  When the new client mentions they were referred, the referring firm will receive a 10% discount on their 2021/2022 premium.

Claims-Made Policy

Excess insurance policies are claims-made, which means the trigger for coverage is not when the work was done but, rather, when the claim or error was known to the insured and reported to the insurer. If you have stopped carrying excess insurance at the time the claim is made, the excess policy will not respond.

Retired Lawyers

Lawyers who have retired from practice continue to be responsible for work they performed prior to retirement. Although the $1M mandatory insurance coverage applies as long as the professional services that are now the subject of a claim took place when the retired lawyer was practising and insured, that does not apply with excess insurance as it is claims made. CLIA now provides an option for retired lawyers to purchase excess coverage on an individual basis to protect them from any claims that arise from work done before retirement. To be eligible, the lawyer must be retiring as a current member of CLIA’s VEP – either as a sole practitioner or as a member of a firm.

New this year CLIA is offering a discounted premium rate for retired inactive lawyers. They will receive a 25% discount off the premium. You must declare on the application form that you are retired and interested in the discount.

2020 Premiums

The premium / renewal rates for 2020 are as follows:

Limit Rate
$1M xs $1M $383
$2M xs $1M $562
$3M xs $1M $657
$4M xs $1M $697
$6.5M xs $1M $862
$9M xs $1M $975
Cyber $90

*All Indicated rates are net of the premium discount

It is important for you to renew, or if this is your first time applying for excess insurance submit your application, before the end of the policy year to avoid gaps in coverage that may leave you unnecessarily exposed to the risk of uninsured liability. CLIA has been working on improving the application process to make it quicker and easier for you to apply for insurance.

This year the online application process will open on June 1, 2020 to ensure that you have time to complete the application and submit premium payments prior to the July 1st policy renewal.

If you have any questions as you complete the application process, please contact the CLIA office and we’d be happy to help. You may email us at renewals@clia.ca or phone Cindy at (306) 347-3057 or Sheila at (306) 347-3055.

APPLICATIONS AND RENEWALS

For more information on the CLIA VEP program and/or excess coverage for practising and retired lawyers, please contact Emma Pink epink@lians.ca at the Lawyers’ Insurance Association of Nova Scotia, and visit www.clia.ca

For first-time applicants, you can contact the CLIA office online at info@clia.ca or by phone at (306) 347-3057 (Cindy) and (306) 347-3055 (Sheila).

FAQs

How do I apply for excess insurance?

Renewals: Please contact Emma epink@lians.ca 902 423 1300

New applicants: Contact the CLIA office online at info@clia.ca or by phone at (306) 347-3057 (Cindy) and (306) 347-3055 (Sheila).

Trust protection indemnification policy

Trust protection coverage is available in the event that a claimant is to be reimbursed for losses related to the theft of money or property by a member of the Nova Scotia Barristers’ Society.

How much coverage is provided by the trust protection indemnification?

$100,000 per occurrence for the group deductible, and $500,000 in the aggregate for the policy period (July 1, 2020 to July 1, 2021).