Do You Need Excess Coverage After Retirement?
As a retiree, you remain responsible for work performed prior to retirement. Although mandatory insurance coverage applies as long as the occurrence took place during the period in which the member was insured, excess coverage does not apply. Like most liability policies, our excess liability program is “claims made”, meaning insurance needs to be in place when a claim is made and not when the work is done. It is not transactional based coverage. Statutes of limitations provide for a time period in which to present claims, and firms that do not renew their insurances will not have coverage for losses reported after the expiry date of the policy. As such, coverage purchased out of the need for a single transaction will need to be purchased as long as the possibility of a claim still exists.
As the value of client’s transactions increases over time, so too does the need to secure adequate levels of Errors and Omissions (E&O) insurance. One large claim could quickly erode the primary policy, leaving you to significant personal liability.
CLIA’s Voluntary Excess Program (VEP) offers the flexibility of additional coverage limits, extending up to $35M per claim, with an annual aggregate limit of $35M. Coverage options under the VEP include limits of $1M, $2M, $3M, $4M, $6.5M, $9M, $14M, $19M, $24M, $29M, and $34M, in excess of a $1M base.
Factors to consider when determining whether you need excess coverage after retirement:
The type of transactions and the potential impact on your clients;
The size and frequency of large transactions;
Whether former associates and partners have coverage that is either inadequate or excludes their past activities; and
Whether the impact of the advice you’ve provided (and therefore potential liability) may grow over time.
Retirees should continue to renew their excess coverage for however long they believe there is a possibility of a claim.
Interested in learning more about excess insurance after retirement? See our handy FAQs on Retirement & Claims Continuity below:
Q: Do I need excess insurance if I'm retiring?
A: Even retired lawyers are still exposed to potential claims for past work. Retiring does not eliminate liability risks for past professional services. Excess coverage continues if your former firm maintains and pays for the policy. If your previous firm dissolves or ceases coverage, you may be exposed to liability.
Q: What happens if I retire but didn’t purchase excess insurance before leaving practice?
A: Retired lawyers without prior excess insurance may face challenges obtaining retroactive coverage for past work. Contact service@clia.ca to discuss any available options tailored to retired lawyers who need coverage.
For more information, visit the CLIA Excess Insurance section of our website.