Professional liability insurance above and beyond the limits of the primary LSO program coverage is called excess coverage. LAWPRO’s Excess insurance can help protect against a single large CLAIM or the possibility of multiple CLAIMS exceeding your primary LSO program coverage. Unlike the primary LSO program POLICY, where coverage is offered on an individual basis, Excess insurance is sold on a firm-wide basis. This means that LAWYERS in a given LAW FIRM can expect to share the same excess limit (i.e., the excess limit may be eroded by the CLAIMS of other firm LAWYERS) and firm LAWYERS may find no coverage for their past practice with other LAW FIRMS.
No – excess insurance is an optional coverage that LAW FIRMS can purchase as additional protection beyond the coverage required of LAWYERS by the Law Society of Ontario.
Certain clients stipulate, as a condition of hiring a LAW FIRM to represent them, that they show proof of professional liability insurance up to a stated limit (often $5 million or $10 million). LAW FIRMS may want to consider such client requirements when deciding what excess limits to apply for. Also, to attract members to a LAW FIRM, minimum insurance requirements that are to be maintained may also be included in partnership or employment agreements.
No – excess coverage is available and can benefit LAWYERS in all areas of practice, including areas where LAWYERS don’t represent clients with stated limit requirements. For family law, real estate law, wills and estates law, rising real estate and personal property values can mean higher potential losses from a single mistake. Of course, underwriting and terms available from competing excess insurers can vary, it would be unusual to see any limitation in areas of practice for the purposes of excess insurance.
In considering whether your LAW FIRM should be purchasing optional Excess insurance, and in what amount, we would encourage you and others in your firm to review the excess insurance resources on LAWPRO’s website. These include our online “stress test” to help assess your potential for a high-value CLAIM, articles and resources on the topic, and frequently asked questions by those considering excess insurance.
As a practice or LAW FIRM grows, the potential exposure to CLAIMS can also grow. More closed files means there’s a greater possibility that a past error will come to light and result in a CLAIM. Taking on more and larger files, becoming involved in other practice areas, and adding new LAWYERS and firm staff, all signal the potential for greater risk. As a LAWYER’S client base ages along with the LAWYER, clients’ net worth – and the financial risk of working with those clients – can increase substantially.
The following excess limits are above the $1 million per claim / $2 million aggregate limit protection afforded under the LAWPRO policy:
- $1 million per claim/$1 million in the aggregate
- $2 million per claim/$2 million in the aggregate
- $3 million per claim/$3 million in the aggregate
- $4 million per claim/$4 million in the aggregate
- $9 million per claim/$9 million in the aggregate
Review the current standard form LAWPRO Excess policy wording