Do You Need Excess Insurance?
Lawyers in a CLIA Subscribing jurisdictions have mandatory errors and omissions insurance with a limit of $1M per claim and a $2M annual aggregate limit.
Excess insurance:
is optional coverage that law firms can purchase as additional protection beyond the coverage required of lawyers by their law society; and
provides another layer of security should your defence and indemnity costs exceed the primary mandatory limits.
Below are several FAQs that may assist in your determination to choose excess insurance:
Q: What factors should I consider when choosing coverage?
A: Consider these factors:
Transaction types and potential client impact
Size and frequency of large transactions
Coverage adequacy for former associates or partners
Potential growth of liability over time
Q: Is excess insurance only for high-risk areas or large firms?
A: No. Any legal work can result in large claims, regardless of firm size. Even routine matters, like drafting a will in a rural area, can result in claims exceeding $1 million. Excess coverage is available and can benefit lawyers in all areas of practice. However, for family law, real estate law, and wills and estates law, rising real estate and personal property values can mean higher potential losses from a single mistake.
Q: Why might my need for coverage increase over time?
A: The need for coverage may increase over time because:
More closed files can result in an increased possibility of a past error;
The firm may increase the number or complexity of files they take on;
The firm may have expanded int other practice areas; or
The clients’ net worth may increase and thereby increase the firm’s financial risk.
Q: Is excess liability insurance available for Alberta lawyers?
A: Yes. The Alberta Lawyers Indemnity Association (ALIA) administers a mandatory liability insurance program for Alberta lawyers, however, CLIA offers excess liability coverage for Alberta lawyers.
Q: Why choose CLIA for excess coverage?
A: Key benefits include:
Low investment for added security
Convenience
Experienced service
Seamless claims handling
High customer satisfaction
Referral program incentives
If you are interested in purchasing excess insurance, CLIA’s Voluntary Excess Program (VEP) renewal opens May 5th. See our Excess Insurance page for more information about the VEP Program and the application process.