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.
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, $9M , new for this policy year, $14M and $19M excess of $1M. Limits above $19M may be available upon special request.
In addition, CLIA continues to offer a stand-alone cyber insurance product with higher limits than the cyber coverage we offer with the mandatory insurance.
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 your client(s);
- 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:
- CLIA is not an incorporated entity, but rather is a contractual arrangement between the Law Society members by way of a Subscribers’ Agreement;
- 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;
- 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
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.
Continuing from last year, CLIA is once again offering a 10% discount if you refer a new client for excess liability coverage. You will receive the discount the year following the current renewal, i.e., on your 2024 / 2025 renewal.
Unlike the mandatory primary coverage LIANS provides, excess insurance policies are claims-made, which means the trigger for coverage is not when the work was done but when the claim 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.
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 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. For retired lawyers that qualify, CLIA is offers a 25% discount on excess insurance. Though you are retired, you remain responsible for work performed prior to retirement.
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.
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 CLIA at [email protected] or phone Cindy at (306) 347-3057 or Sheila at (306) 347-3055.
APPLICATIONS AND RENEWALS
Renewals: Please contact Alex [email protected] 902 423 1300
New applicants: Contact the CLIA office online at [email protected] or by phone at (306) 347-3057 (Cindy) and (306) 347-3055 (Sheila).