The Business Innocent Covered Party Endorsement (the “BIC endorsement”) is optional coverage designed to protect members and firms against vicarious liability claims arising from a professional liability claim that has been denied due to the “business exclusion” in the compulsory policy. The business exclusion, Exclusion 6.2, operates to exclude a claim by or in connection with any organization in which the responsible member, their family or their law firm partners, associates or associate counsel had effective management or control or a greater than 10% ownership interest at the time of the error. Coverage is excluded for both the lawyer responsible for the error and for any member and law firm vicariously liable for the responsible member’s acts.
Copies of forms and documents directly associated with this coverage can be found here:
The 2023 BIC fee is calculated on the basis of $200 for each person at a firm who is covered under Part A of the Policy. Although the BIC endorsement must be renewed annually on the renewal date for the Policy, firms may purchase it during the year at a pro‑rated cost. There is no additional BIC fee for lawyers joining the firm during the endorsement period, nor is there any refund for lawyers departing.
The firm must have the endorsement both at the time of the error and at the time the claim is reported to have coverage. The coverage need not be continuous, provided these two requirements are met.
The endorsement extends cover only to members and firms exposed to vicarious liability who exercised due diligence in making reasonable and regular inquiries of other indemnified members they supervise, and had no knowledge of the circumstances giving rise to the application of the business exclusion under the Policy. Firms may implement whatever due diligence processes they choose. If a claim is made, Lawyers Indemnity Fund will investigate the process to determine whether the due diligence requirements of the endorsement were met. To assist firms, LIF has developed a protocol which, if implemented, the indemnitor will accept as meeting the due diligence requirements of the BIC endorsement. This protocol can be found in the information sheet. If you would like the indemnitor’s position on whether or not your firm’s specific due diligence process will satisfy the requirements of the endorsement, please provide, in writing, a detailed description of the process to indemnity@lif.ca.
Please note that the BIC Endorsement does not provide coverage for legal services triggering Exclusion 6.1 of the Policy, the “benefit exclusion." If a lawyer provides services that fall within the benefit exclusion, coverage under the Policy will be denied to that lawyer and any other lawyer vicariously liable for the claim. For more information on the benefit exclusion, please refer to the referenced Exclusion 6 Information Sheet.
This information sheet is provided for your guidance only and is not intended to be exhaustive or definitive.
The BIC endorsement wording governs.