E&O Insurance >FAQS>LAWYERS in Private Practice FAQs
LAWYERS in Private Practice FAQs
If you have questions that are not answered below, or if you need further clarification or information, please contact
LAWPRO®'s Customer Service department toll-free at 1-800-410-1013, 416-598-5899 in Toronto
or at [email protected].
Coverage is provided in the ordinary course for LAWYERS who maintain a professional liability insurance policy through LAWPRO for the mediation and arbitration services that they provide. This is the case whether or not these services are provided through the law firm itself or through a corporation. In the latter case, the LAWYER would be covered for the mediation and arbitration services which the LAWYER provides for the corporate entity, although the corporate entity itself technically would not be covered.
The implications for you, a practising LAWYER carrying the standard insurance coverage, depend on the type of program through which these services are provided, as well as your current insurance status with LAWPRO.
For PRO BONO SERVICES provided through approved programs associated with Pro Bono Ontario LAWYERS who buy the standard insurance coverage and provide PRO BONO SERVICES
through approved programs associated with Pro Bono Ontario will qualify for the following program enhancements with respect
to such approved PRO BONO SERVICES:
They will not be required to pay any deductible amount or CLAIMS history levy surcharge for CLAIMS relating solely to such
Those applying for the part-time practice option will not be required to consider any hours of professional time or
past CLAIMS relating solely to these PROFESSIONAL SERVICES
in their application for this part-time practice option.
These insurance program changes apply only to PRO BONO SERVICES provided after January 1, 2003, and will not include legal work beyond the following:
those rendered to low income persons in civil matters or in criminal matters for which there is no government obligation to provide counsel;
those that simplify the legal process for, or increase the availability and quality of
to persons of limited means; and/or
those rendered to charitable, non-profit and public interest organizations with respect to matters or projects to address the needs of low-income and disadvantaged individuals.
For any other pro bono work With the exception of the foregoing, the LAWPRO insurance policy does not distinguish between
PROFESSIONAL SERVICES provided on a pro bono
basis, and PROFESSIONAL SERVICES for which LAWYERS
are paid. Thus, if you pay the insurance premium, you would have the same liability coverage for your pro bono work as
you do for any other legal work that you provide to clients.
Coverage for these PROFESSIONAL SERVICES would be
subject to all of the terms and conditions of the insurance policy as it applies to
PROFESSIONAL SERVICES you provide in private practice.
For example, you would be responsible for paying any deductible if a CLAIM is made against you that arises out of the pro bonoPROFESSIONAL SERVICES provided, and also could be
subject to a CLAIM history levy surcharge.
Coverage is provided in the ordinary course for PROFESSIONAL SERVICES
you provide in your capacity as a LAWYER of the Law Society of Ontario. There is however,
no coverage for work you do with respect to U.S. law or any other foreign law.
If you or your firm were named in a CLAIM with regard to the services provided by the U.S. lawyer, there would be no coverage under the Law Society program for professional services performed with respect to U.S. law or other foreign laws. While we are not in a position to offer you coverage for services you provide with respect to foreign law, we would strongly recommend that you approach the commercial market to obtain coverage. Your general insurance broker may be of some assistance to you in that regard.
Pursuant to Part II, SPECIAL PROVISIONS, of the Policy, LAWPRO will indemnify you with respect to the performance of professional services where such services are performed outside of Canada with respect to the laws of Canada, its provinces and territories, provided that:
Such services occupy less than ten per cent (10%) of your docketed time or gross billings for professional services for the year; OR
the CLAIM or civil suit against you, and the issues including liability and damages are adjudicated on their merits in Canada pursuant to the laws of Canada, its provinces and territories.
As you have advised that you perform and docket more than ten per cent (10%) of your professional services outside of Canada, you would not be covered by insurance pursuant to subsection (a). With respect to subsection (b), your Ontario insurance would indemnify you in the ordinary course for any suit in which all aspects of the CLAIM or civil suit are adjudicated on their merits in Canada. Therefore, it may be prudent for you to inquire into insurance in Michigan. It is probable that, to practise in the way in which you described, you will require insurance both in Ontario and in Michigan.
The policy under the Law Society insurance program provides coverage in the ordinary course for Canadian patent and trademark activities which you do as part of your legal practice. With regard to the performance of professional services outside of Canada, coverage is provided where such services are performed with respect to the laws of Canada, its provinces and territories, and such services occupy less than ten per cent of an INSURED's time docketed or gross billings for professional services in each calendar year or the CLAIM or civil suit brought in relation thereto is made in Canada and the issues thereon, including liability and damages, are adjudicated on their merits in Canada pursuant to the laws of Canada or a Province thereof by a court in Canada. There is no coverage under the policy for activities performed with respect to the laws of other countries (including the U.S.). Therefore, you may wish to investigate separate patents and trademarks coverage for these areas.
Upon receipt of written confirmation of the above, LAWPRO will cancel the deceased LAWYER'S ongoing primary Professional
Liability Insurance practice coverage of $1 million per CLAIM/$2 million in the aggregate under the Law Society of Ontario's
mandatory insurance program. Appreciating the time and effort that is required to assess the ongoing insurance requirements of an
estate, LAWPRO provides a limited period of increased Run-Off protection in the amount of $1 million per CLAIM/$2 million in the
aggregate, at no cost. This coverage will expire 90 days after the date of death and is eroded not only by indemnity payments,
but also by CLAIM expenses and costs of repairs. It is subject to a $5,000 deductible per CLAIM and is reduced by any CLAIMS
already reported on behalf of the deceased LAWYER while exempt in the past. We encourage you to read the
"Insurance Matters for Retired LAWYERS" booklet.
It provides further details regarding the standard Run-Off Coverage, but will also guide you in assessing what amount of insurance
is appropriate for the estate, and what insurance options are available. It will help you make an informed decision about the
continued liability of the estate for PROFESSIONAL SERVICES
provided by the deceased LAWYER, put that liability into context, and guide you in assessing what amount of insurance is
appropriate for the estate.
Contained in Part III of the LAWPRO 2009-001 Professional Liability Insurance policy for LAWYERS is the following exclusion to coverage:
This POLICY does not apply:
to any CLAIM made by or in connection with a business enterprise or corporation in which the INSURED and/or the INSURED'S spouse and/or the INSURED'S LAW PARTNERSHIP partner(s) and/ or LAW PARTNERSHIP partner's(s') spouse(s) have or, at the time of the error, omission or negligent act, or thereafter, had beneficial ownership in an amount greater than ten percent (10%), to the extent that such payment or judgment represents the share of ownership held by the INSURED and/or the INSURED'S spouse and/or the INSURED'S LAW PARTNERSHIP partner(s) and/or LAW PARTNERSHIP partner's(s') spouse(s);
Essentially, this means that, subject to any other relevant policy provisions, the policy will apply fully to a CLAIM where the INSURED, insured's spouse, partners and their spouses together, directly or indirectly own 10% or less of the claimant business enterprise or corporation, but anything more would be excluded on a proportional basis under Part III (c) of the policy. In your case, as you own one third interest in the corporation, one-third of the CLAIM would be excluded from coverage in the ordinary course.
Our policy provides coverage for "Professional Services", which is defined under the 2009-001 Professional Liability Insurance policy for LAWYERS as:
PROFESSIONAL SERVICES means the practice of the Law of Canada, its provinces and territories, and specifically,
those services performed, or which ought to have been performed, by or on behalf of an INSURED in such INSURED'S capacity
as a LAWYER or member of the law society of a RECIPROCATING JURISDICTION (not as a member of the Barreau du Québec), subject to Part II Special Provision A; and shall include, without restricting the generality of the foregoing, those services for which the INSURED is responsible as a LAWYER arising out of such INSURED'S activity as a trustee, administrator, executor, arbitrator, mediator, patent or trademark agent.
As outlined in this definition, insurance is provided only for those services which you provide in your capacity as a LAWYER, and not as a director or in any other capacity. Our policy, therefore, will not provide coverage for these services in the ordinary course. While we cannot directly offer an opinion on an organization's or individual's needs with respect to directorship liability insurance, you may wish to contact your insurance broker for information pertaining to this type of coverage.
Effective January 1, 2010, coverage for practising insured lawyers under the LAWPRO insurance program is broadened to include a limited form of overdraft protection in relation to their PROFESSIONAL SERVICES for frauds involving the deposit of COUNTERFEIT CERTIFIED CHEQUES AND COUNTERFEIT BANK DRAFTS into lawyers' trust accounts.
This protection is subject to a number of restrictions:
A sub-limit of $500,000 per claim/aggregate per lawyer and per firm, applicable to indemnity payments, claim expenses and/or costs of repairs;
The minimum DEDUCTIBLE that will apply is $5,000 applicable to indemnity payments, CLAIM expenses and/or costs of repairs. If you had opted for a higher DEDUCTIBLE as shown in your POLICY Declarations, this higher DEDUCTIBLE will apply. (Note that this provision also applies in relation to those CLAIMS involving COUNTERFEIT CERTIFIED CHEQUE(S) AND COUNTERFEIT BANK DRAFT(S) that do not result in an overdraft position);
The lawyer and firm must wait eight full business days following the date of deposit of the COUNTERFEIT CERTIFIED CHEQUE OR COUNTERFEIT BANK DRAFT without notice or advice of the possible true nature of the instrument, before funds are drawn; OR
If waiting less than the eight full business days, the lawyer and firm also must have received confirmation from either the lawyer's financial institution or the drawee financial institution of verification by the drawee financial institution that the instrument was valid and that it was safe to withdraw funds, as documented in writing between the lawyer and financial institution, before drawing funds;
The COUNTERFEIT CERTIFIED CHEQUE OR COUNTERFEIT BANK DRAFT must have been received by the lawyer for inspection and deposit, and the institution indicated as having issued the counterfeit instrument must be a Canadian financial institution;
No protection is afforded in relation to retainer deposits, untransferred fees, or other amounts relating to legal fees, accounts or fee arrangements.