The $2,800 base premium applies to the standard insurance program that provides coverage of $1 million per claim/$2 million in the aggregate with a $5,000 DEDUCTIBLE applicable to claim expenses and indemnity payments. Actual premiums can be lower, depending on the options selected.

For example, part-time practitioners and lawyers who restrict their practice to criminal and/or immigration law will pay a premium of only $1,680 in 2001.

As in the past two years, revenues, from the real estate, civil litigation and claims history levies again will be applied as insurance premiums in 2001. Maintaining these levies as premiums is an important aspect of risk rating in the insurance program; statistical analyses indicate that civil litigation and real estate represent a disproportionate risk when compared to other areas of practice.

Planning to e-file? Here's how

What you'll need
Before you click on File Online, make sure you have the following at hand:

• your Law Society member number (check the mailing label on your 2001 insurance application package);
• your unique, confidential password.

• If you have completed any online LPIC filings in the past, the password you used will still be valid.
• If you have forgotten your password, you may be able to reconfirm it using the "Forgot your password" function on the LPIC website.
• If you do not have a password you can complete our online password request form (a Customer Service representative will then contact you to establish your password), or you can call (416) 598-5899 or 1-800-410-1013 during regular business hours and request a password. To minimize your wait time, we suggest you call and arrange your online filing password as soon as possible. DO NOT WAIT UNTIL OCTOBER 31st.

1. Click on File Online in the left navigation bar.
2. You will be prompted to enter your Law Society member number (see your mailing label on your 2001 application package) and your unique, confidential password.
3. Select 2001 Professional Liability Insurance Application - Online form from the list of options. Your application form will appear, pre-populated with your information pulled from our database.
4. Follow the on-screen instructions for completing your application - in minutes! All of the information on the 2001 insurance program and options are available online.

Application deadline November 10, 2000
In early October, all lawyers in private practice in Ontario in 2000 will receive an application package for the 2001 liability insurance program. The packages contain pre-populated year 2001 application forms, program information booklets and exemption forms.

Sole practitioners and those who practise in firms of less than 10 lawyers will be mailed to individually. For firms with 10 or more lawyers, application packages will be mailed to the managing partner or insurance contact in the firm, along with special instructions for filing.

Applications will be pre-populated with lawyer-specific data drawn from LPIC's database. In many cases, lawyers will have to only verify the information on the pre-populated form, and sign the appropriate declarations and warranty sections. Changes can be easily indicated on the reverse of the application.

Applications must be completed and returned to LPIC by November 10, 2000, to avoid the late-filing surcharge of 30 per cent of the base premium.

Volume of billings question
For 2001 all lawyers applying for insurance coverage will need to provide information on either their range of actual gross billings, or on the average gross billings per lawyer in the firm, for the fiscal year ended in 1999.

Information on the volume of billings is one factor that LPIC analyses when examining the risk associated with law practice individually and across the profession. LPIC had been using information from the Volume Levy Surcharge, which was discontinued effective with the 1999 insurance program. To maintain the integrity of its database and its ability to assess all factors influencing risk, LPIC reintroduces on the 2001 application the requirement that all lawyers provide volume billings information. starting with the 2001 application form. As well as being able to choose between the actual or average billings option, lawyers can select from one of seven pre-set ranges of billings (e.g. $125,001-$200,000) rather than have to provide specific information. These approaches minimize the administrative burden associated with providing this information, and ensure LPIC obtains statistically reliable data.

Who must file an application?

• Any lawyer insured under the LPIC program in 2000 who intends to continue in private practice in 2001.
• Any lawyer who was exempt under the program in 2000 but intends to return to private practice in 2001.
• Any in-house counsel, government or education lawyer who, in the course of employment or otherwise, provides legal services to third parties.
• Any lawyer who, although retired from active private practice, occasionally provides legal services.
• Any lawyer who, although not resident in Ontario, engages in more than "occasional practice" in Ontario, as defined under the Rules for Exemption Eligibility.

Report to Convocation highlights
As it does every year at this time, the LPIC Board of Directors recently provided Convocation with an update on the insurance program and its key recommendations for the 2001 program. Convocation accepted the report and its key recommendations in their entirety.

Loss costs
Based on past and current trends, LPIC expects Ontario lawyers to again report about 2,000 new claims in 2001, and the cost of claims to be around $65 million. Both of these figures are consistent with the program’s experience in each of the last four years.

Lower premiums
Although the number and cost of claims have not fallen, base premiums will be down by $350 in 2001, to $2,800 per insured lawyer. New calls, part-time practitioners and lawyers who restrict their practice to criminal and/or immigration law will qualify for a premium of only $1,680. Specific premiums, of course, will vary, depending on the actual practice and coverage options selected.

The increase in the number of lawyers in practice combined with higher investment income and an increase in anticipated premium revenues generated from the real estate and civil litigation transaction levies, enable LPIC to reduce the base insurance premium in 2001 to its lowest level in six years. For 2001, LPIC expects to insure about 18,000 lawyers. Revenues from real estate and civil litigation levies, and from the claim history surcharge (levied against all lawyers with claims) will generate about $30 million in revenues in 2001, up from $25 million a year earlier.

Volume of billings
Because of the relationship between risk and billings (size of practice), and the discontinuance of the Volume Levy Surcharge, LPIC has re-introduced a volume of billings question to its 2001 application form (for details please see Volume of billings).

Risk rating
To ensure that the insurance program fulfills its risk rating mandate, LPIC conducted a detailed analysis of the relationship between claims costs, areas of practice and premiums. This analysis reaffirmed earlier studies which indicated that:

• real estate and civil litigation represent a disproportionate risk compared to other areas of practice;
• litigation practice has emerged as an area of practice representing greatest potential claims exposure; and
• the present premium structure – with real estate and civil litigation levies applied as premiums – ensures premiums by and large reflect the risk to the insurance program represented by lawyers in different areas of practice. For example, litigation and real estate lawyers, who account for the majority of claims costs, pay the highest premiums (including base premium and transaction levies).

This column, which appears in the lpic:news from time to time, explores specific policy provisions that, based on calls from lawyers into our Customer Service Department, need to be highlighted or require additional explanations. This issue's Know Your Policy column deals with DEDUCTIBLES and the impact on DEDUCTIBLES of a lawyer acting for more than one person or organization having a conflict of interest.

Acting on both sides of a transaction? You could be faced with double the DEDUCTIBLE!
Although it is generally acknowledged that acting on both sides of a transaction presents a Pandora's box of potential problems, lawyers continue to do so - and put themselves into potential conflict of interest situations.

What's less well understood are the policy provisions governing situations in which a lawyer acts on both sides of a transaction and later finds him/herself embroiled in a conflict claim.

As stated in the LPIC Policy, lawyers who find themselves in this situation will be required to pay DOUBLE the DEDUCTIBLE amount indicated in their policy Declarations.

The specific policy provision is as follows:

Part IV - GENERAL CONDITIONS
C. DEDUCTIBLE
The insurer's obligation to pay on behalf of the Insured applies only to those amounts in excess of the Insured's DEDUCTIBLE, as defined in Part V Definition (e), as applicable to each CLAIM, subject to the following additional provisions: " (ii) in the event of a claim in any way relating to or arising out of a circumstance in which an Insured provided Professional Services for more than one person or organization having an apparent or alleged conflict in interest, the Insured's DEDUCTIBLE shall be double the amount indicated in item 7 of the Declarations."

The full text of your 2000 LPIC policy is available online at the Insurance section of our website.

Do you have all the insurance coverage you need???
Recent news concerning activities of lawyers highlight once again the need for lawyers to take a good, hard look at their potential exposure to claims and the insurance coverage they have in place. Although they're the exception rather than the rule, claims which exceed basic insurance limits do happen - often with devastating personal and professional consequences for the lawyer(s) involved. Simply put, the minimum mandatory coverage required by the Law Society may not be enough.

That's why LPIC recommends that lawyers across the province carefully consider their potential exposure to claims, and assess the adequacy of the insurance coverage limits they have in place.

Two ways to increase insurance coverage above the mandatory primary limits offered by the LPIC program are additional Innocent Party Coverage, and through Excess Insurance Coverage. Significant reductions in the premiums for both of these insurance options make them an even more attractive option for many lawyers in 2000. This article explains each of these coverage options. We encourage you to review the information carefully, and to take a few minutes to assess how these coverage options could be useful in your situation.

Innocent Party Insurance Coverage
As its name suggests, Innocent Party Coverage provides protection for innocent partners against the dishonest, fraudulent, criminal or malicious activities of others, such as present and former partners, associates, employed lawyers and firm employees.
·   All lawyers practising in association or partnership must purchase the Mandatory Innocent Party Coverage.
·   To further protect themselves, lawyers can apply to increase their coverage limits as outlined below.

Mandatory Innocent Party Coverage

Innocent Party Sublimit Buy-Up (for lawyers in associations or partnerships)
Lawyers can increase Innocent Party Sublimits as follows:
·   $500,000 per claim/in the aggregate +$150/lawyer (total premium of $400/lawyer)
·   $1 million per claim/in the aggregate +249/lawer (total premium of $499/lawyer)

To minimize the chance of a gap in coverage between Innocent Party and Excess Insurance, LPIC strongly recommends that all firms buy up the Innocent Party Sublimit Coverage to $1 million per claim/in the aggregate, at which level Excess Insurance coverage, if in place, would kick in.

Optional Innocent Party Sublimit Coverage (for sole practitioners)
This coverage is designed to meet the need of sole practitioners who, because of present or past circumstances, could find themselves exposed to Innocent Party claims. These situations could include, for example:
·   Working in a partnership or association before practising as a sole practitioner;
·   Acting as back-up counsel for other practitioners, or relying on other practitioners to act as back-up counsel for them;
·   Assisting others on leave or having other lawyers assist the sole practitioner while on leave.
As well, sole practitioners may require this type of coverage to meet the demands of clients, financial institutions and other organizations in an era of escrow closings and electronic registration.

Coverage sublimits
Each application is underwritten on an individual basis, based on a risk assessment of information provided in the Innocent Party Sublimit application. Lawyers can select one of three limit options:
·   $250,000 per claim/in the aggregate
·   $500,000 per claim/in the aggregate
·   $1 million per claim/in the aggregate.

Excess Insurance
Excess Insurance is often called a "peace of mind" coverage, as it provides an additional layer of protection should claims exceed the $1 million per claim/$2 million in the aggregate levels covered by the primary LPIC insurance program.

LPIC's Excess Insurance is now a risk-rated program, with premiums underwritten based on a risk assessment of information supplied in the Excess Insurance application. The program was developed to meet the needs of sole practitioners and lawyers practising in small firms. More than 1,100 lawyers are now insured with LPIC's Excess Insurance Program: Will you be joining their ranks?

Coverage limits (per firm)
Excess limits are provided on a FIRM basis, above the $1 million per claim/$2million aggregate limits provided each INDIVIDUAL lawyer under the primary LPIC insurance program. Firms have a choice of Excess limits as follows:
·   $1 million per claim/$2 million in the aggregate
·   $2 million per claim/$4 million in the aggregate
·   $3 million per claim/$6 million in the aggregate
·   $4 million per claim/$8 million in the aggregate
·   $9 million per claim/$18 million in the aggregate

For more detailed information and tools to assess your risk, visit Excess Insurance.

 

Lower premiums help buy additional coverage
Premiums for LPIC's Excess Insurance in 2000 are down between 10 and 35 per cent. Premiums to increase Innocent Party Sublimits have decreased about 40 per cent. The bottom line: For about the same insurance premium you paid in 1999, you can buy yourself significantly more coverage - and peace of mind -- in 2000. Consider the following example of a lawyer who practises in a partnership.

Description	1999 premium	2000 premium	Savings
Required insurance: primary program · Base premium for primary insurance	$3,650	$3,150
· Mandatory Innocent Party Coverage	$400	$250
Total	$4050	$3400	$650
Optional insurance coverage · Innocent Party Sublimit Buy-Up to $ 1million per claim/aggregate	$399	$249	150
· Excess Insurance - $1 million per claim/$2 million in the aggregate*	$540	$350	190
Total savings			$990

Applying the savings
Assuming the lawyer had not purchased any of the optional insurance coverage available in 1999, he could have applied the $650 in savings realized from lower premiums for the primary program in 2000 towards securing both Innocent Party Buy-Up and Excess Coverage - and still come away with money in the bank.

If this lawyer had purchased both the primary and optional coverage as outlined above in 1999, he could apply the $990 premium savings towards securing higher Excess Coverage limits for 2000: For example, increasing limits to $4 million per claim/$8 million in the aggregate would have cost lawyer A less than $750*, leaving him with significantly enhanced insurance coverage at a lower cost than he paid in 1999.

* premiums for lawyers in the lowest risk category, based on an assessment of risk information provided in applicable application form.

It's not too late! Although January 1 has come and gone, you can still buy additional liability insurance coverage for 2000. Application forms to increase your Innocent Party Sublimit Coverage and to secure Excess Insurance Coverage are available online from the FILE ONLINE section of the LPIC website or from our Customer Service Department at 1-800-410-1013, in Toronto (416) 598-5899. Once LPIC has received and approved your application, your excess coverage would be in effect.

 

LPIC to insure non-lawyer MDP partners
At their December 1999 Convocation, Benchers of the Law Society decided that firms engaged in law practice in a multi-discipline partnership (MDP) will have to obtain their primary liability insurance for non-lawyer partners from LPIC.

As is the case for lawyers, LPIC will provide primary coverage of $1 million per claim/$2 million in the aggregate, and will assess non-lawyer partners based on risk.

MDPs can purchase excess insurance coverage for non-lawyer partners from LPIC or any other insurer in the marketplace.

For additional information and to apply for insurance coverage for non-lawyer partners in an MDP, contact LPIC Customer Service at (416) 598-5899 or toll free at 1-800-410-1013 or via e-mail service@lpic.ca.

 

Amendment to Solicitors' Act clarifies indemnification agreements between employers and lawyers

A proposed amendment to Section 22 of the Solicitors' Act clarifies a company's ability to indemnify an employed lawyer.

Previously, Section 22 of the Solicitors' Act, R.S.O. 1990, c.S.15, stated that any agreements relieving a solicitor from liability for negligence would be void.

Specifically, the Act states:

"22. A provision in any such agreement that the solicitor is not to be liable for negligence or that he or she is to be relieved from any responsibility to which he or she would otherwise be subject as such solicitor is wholly void."

The amendment adds the following subsection to the Act:

"(2) Subsection (1) does not prohibit a solicitor who is employed in a master-servant relationship from being indemnified by the employer for liabilities incurred by professional negligence in the course of the employment."

 

Excess campaign strikes a chord

LPIC's concerted effort to raise lawyers' awareness of their potential need for excess insurance is making its mark: The number of firms securing excess insurance coverage from LPIC has more than doubled to more than 500 from 250 in 1999. As well, requests for cost estimates and additional information continue to flow into LPIC's Customer Service Department.

Assess Your Insurance Needs helps you determine why excess insurance is an option you should be considering.
Excess Insurance Coverage outlines excess options available to your firm.

To apply for LPIC's Excess Insurance program, complete the online Excess Insurance Application.

 

Key dates to note for 2000

Key dates to add to your diary are as follows:

January 15, 2000

• The first instalment is payable from lawyers who opt to pay their 2000 premium by quarterly or monthly instalments.
• As well, lawyers who opt to pay instalments by cheque must remit post-dated cheques for their quarterly or monthly instalments to LPIC by this date.

January 31, 2000
Real estate and civil litigation transaction levies and forms for the last quarter of 1999 are due and payable.

January 15, April 15, July 15, October 15
Quarterly instalment payments for insurance premiums are payable.

March 1, 2000
Deadline for paying the 2000 premium in a lump sum by credit or debit card, or cheque. Lawyers who pay their premium in a lump sum by cheque are eligible for a $150 premium reduction if payment is made by this date.

April 30, 2000
Deadline for filing forms exempting yourself from having to pay the real estate or civil litigation transaction levy surcharges for 2000. Exemption forms are included in the 2000 Levy Surcharge and Exemption Forms booklet.
NOTE: All lawyers must file either a transaction levy form each quarter, or a form exempting themselves from payment of the real estate and/or civil litigation transaction levy surcharges.

April 30, July 31, October 31, 2000 and January 31, 2001
Real estate and civil litigation transaction levies and forms are due and payable.