Frequently asked questions

If a negligence claim is made against you, the policy provides two types of financial relief.  If you make a mistake in your practice – or someone says you have – the policy pays:

• Indemnity: If your mistake causes a loss to your client or someone else, the policy will pay compensatory damages awarded against you, including interest, or fund a settlement. Sometimes, we are able to take repair steps that will avoid or reduce a loss. The policy will also pay for those steps as indemnity. Any indemnity payment, such as a settlement or statements of account from repair counsel, trigger payment of your deductible.
• Expenses: If the policy will pay for the loss claimed, we will also pay for expenses incurred to defend you, such as accounts from defense counsel. An expense payment does not trigger your deductible.

In taking care of your defence, we will either defend the claim ourselves or retain counsel experienced in lawyer malpractice to act on your behalf. If you are sued outside of North America, we may elect to have you investigate and defend, and reimburse you for the costs you incur. Of course, the policy will only respond if you pay the annual indemnity fee (with the exception of certain pro bono services) and the claim is covered. 

The policy does not pay for your own losses like loss of income.   

Policy:  Part A Professional Liability Indemnity (errors & omissions)

The policy pays up to:

• $1 million for all claims arising out of either a single error or more than one "related" error, regardless of how many claims, claimants or firm lawyers are involved, or the number of different capacities in which the lawyers act. 

About "related" errors or mistakes:

• These most commonly occur in relation to the “same or similar underlying facts, events, transactions, activities or undertakings, including accidents, investment programs or schemes, loan agreements, offerings of ownership interest or debt, corporate reorganizations, tax plans, estates, real estate developments, leases, licences, commercial ventures and litigation matters.” 
• They are not "related" just because they are identical or cause losses to the same client. For example, repeating the same drafting error in every will prepared for different clients, or making mistakes in both a motor vehicle claim and a conveyance for the same client, will not, without more, make the mistakes related.
• It doesn’t matter if the mistakes are made by you or other lawyers at your firm working on the same matter. The mistakes are still related.

• $2 million for all claims made against you in any given year. 

These limits include defence costs or other expenses we pay.

Policy:  Definition of "error"; Condition 1.3; Declarations

Buying excess insurance may be a very good idea. Learn why.

None, if a claim is defended successfully.  However, there are generally three consequences if we pay a settlement or judgment, or pay repair costs trying to fix a mistake:

• You pay a deductible of $5,000, or $10,000 for mistakes reported within three years of each other. Your firm may agree to pay a deductible for you – that is a matter between you and your firm.  If we are unable to collect from you, partners at your firm when the mistake was made are also liable for the deductible;
• You pay a surcharge of $1,000 on your indemnity fee for five years. The total surcharges will not exceed the amount we pay in indemnity;
• You lose eligibility for the part-time discount for five years.  

These consequences are waived if the payment relates to certain pro bono services or a real estate lawyer’s advice given pursuant to the Conveyancing Protocol. 

The policy will still protect you through built in tail coverage. As long as the mistake occurred when you were paying the insurance or indemnity fee, you are covered even if you are no longer in private practice when the mistake is discovered or a claim is made against you. In addition, while you’re still a Law Society member, the policy covers you for certain pro bono activities even if you’ve left private practice and no longer pay the insurance or indemnity fee. 

Find out here.

Assistants, paralegals, designated paralegals and articled students 

If your legal assistant, paralegal, designated paralegal or articled student makes a mistake in helping you on a matter, you are liable. The policy will respond as if the mistake was yours, not theirs. As you are required to effectively supervise staff and students, they are indirectly protected under your policy. You will enjoy coverage and we will not subrogate or claim over against them. 

Partners and apparent partners (includes space-sharers)

If your partner makes a mistake, you and your firm may also be sued. As long as your partner paid the insurance or indemnity fee at the relevant time, your partner’s coverage under the policy will extend to protect you and the firm. That protection exists regardless of whether you attract liability as an actual or apparent partner.

You may want to enter into a space-sharing or other arrangement with other lawyers without attracting liability for their mistakes. As a useful starting point, talk to a Practice Advisor or review the information in "Lawyers Sharing Space." You may also find the decisions in Kent v. H.A.D. Oliver et al and Westfair Foods Ltd. v. Coopers & Lybrand useful as you research the issue of partnership liability. And although you are protected under the erring lawyer's policy if you do attract liability, that protection may not be enough. As a space-sharer, you may not be aware of or have any control over the business activities of other lawyers in the office. If the erring lawyer loses coverage under the policy's business or benefit exclusion, there is no coverage for you or anyone else. You will also want to consider if excess insurance is appropriate. Be sure to let your broker know about the space-sharing arrangement.

Non-lawyer professionals at your firm

Patent and trademark agents, immigration consultants or other non-lawyer professionals at your firm may be providing services either independently of any of the firm lawyers or in a non-legal area of expertise. There is no cover for you or anyone else in the firm under the policy for any mistakes made by these individuals. You will want to either ensure they have arranged cover with their own liability insurer or talk to your broker. You may also want to consider if practising in a multi-disciplinary partnership is of interest, as non-lawyer partners of MDPs do have to buy our policy and participate in the compulsory program.  

Outside service providers

You may contract with registry agents or others outside your firm to help you on a matter. If that individual makes a mistake, you may still be liable to your client. Although the policy will then respond as if the mistake was yours, we will generally subrogate or claim over against the outside party. 

Policy:  Definition of "additional Covered Party"

If we would defend and indemnify you, we’ll defend and indemnify your firm or law corporation. 

It depends. Most claims are fully covered and we defend and indemnify you. However, some litigation involves both covered and non-covered allegations or claims. For instance, if you provide legal services to a company and sit as a director, you may be sued both as a lawyer (covered) and as a director (not covered). Or, you may be sued both for damages for negligence (covered) as well as for a return of fees (not covered). In these situations, you would bear some responsibility for the cost of the defence because of the non-covered claims. If we need you to contribute, we may ask you to do so at the start or wait until the claim is concluded. You are also responsible for paying any part of a judgment or settlement relating to the non-covered portion. 

Policy: Indemnity Agreements A 2.3 through 2.6

For more questions about whether you have coverage in certain circumstances or for a particular activity, contact an advance ruling advisor. Depending on the nature of your question, we may ask you to send us a detailed description of the circumstances, in writing. 

The Law Society's Registration and Licensee Services will help you apply for indemnity coverage or claim an exemption or the part-time discount.

For a proof of indemnity, please log-on to your Law Society Member Portal.

Each year, the Lawyers Indemnity Fund reports on the indemnification program and policy in Lawyers Indemnity Fund: Annual Reports. The program report includes any policy wording changes as well as statistics on claims and potential claims.