Benefits of Voluntary Excess Professional Liability Insurance
Excess insurance provides another layer of security should your defence and indemnity costs exceed the primary mandatory limits. As the value of client matters and transactions increases over time, so too does the need to secure adequate levels of errors and omissions insurance. One large claim could quite quickly erode the primary policy, leaving you or your firm exposed to significant personal liability.
The CLIA Voluntary Excess Program (VEP) has been protecting subscribing firms in the Nova Scotia legal community for over 20 years, and continues to be the leading provider of excess errors and omissions insurance in the province. CLIA offers members an option to purchase excess insurance up to an additional $9 million in excess of the primary policy coverage of $1 million. Should a member or firm require additional coverage, alternate insurance markets are available. For limits in excess of $9 million, please contact your local commercial broker.
This program is proud to be a not-for-profit plan designed by lawyers for lawyers, with stable coverage and rates during both “soft” and “hard” market conditions. Firm-wide coverage includes partners, employed lawyers, professional corporations and service/management companies, as well as former partners and employed lawyers for services rendered prior to retirement.
Matters you should consider in assessing the adequacy of existing insurance limits for you or your firm:
- the type of transaction and its potential impact on the client;
- the size of the transaction and the frequency of large transactions;
- regarding past employees and partners, the possibility that their present insurance is either inadequate or excludes their past activities;
- the time horizon of the advice, as the impact of the advice may continue to grow over time as may the potential liability; and
- your risk tolerance.
Premiums vary with the amount of excess coverage purchased. A member can choose the level of excess insurance based on the potential risk exposure.
The total premium is based on the total number of lawyers in a firm. If a member is a partner or associate in a firm and the member requires excess insurance, the excess policy must be purchased for the firm as a whole.
Discounts may be provided to subscribing members in the form of premium credits. Firms that have been with the program for a number of years may be eligible to receive additional credits based on the length of their participation in the excess program. Discounts and credits for renewals are communicated to each firm in their renewal application, while new applicants receive their credits as a percentage towards their premium calculation.
Keep in mind, there may be further reductions if claims experience at June 30, 2014 allows for a distribution of existing profit sharing coming out of prior years. These reductions, if available, will be applied against the posted rates.
It is important to note that lawyers who have retired from practice continue to be responsible for work performed prior to retirement. Now available is the option for retired lawyers to purchase excess coverage on an individual basis, to address any unforeseen circumstances that may develop after retirement, provided they are retiring as a current member of CLIA’s VEP, either as a sole practitioner or as a member of a firm.
Excess insurance policies are generally claims-made, which means that it is not when the work was done that triggers coverage but when the claim was known to the insured and reported to the insurer that triggers the policy. If you have stopped carrying excess insurance at the time the claim is made, the excess policy will not respond.
New business applications can be accepted at any time.
To apply for excess insurance offered by CLIA, download the 2013-2014 Volunteer Excess Insurance Application. The new policy and the new rate information will be featured in the 2014-2015 application June 1 on the CLIA website.