Lawyers Professional Liability Insurance

In Brief: Lawyers Professional Liability Insurance 

The adage “You can be sued for ANYTHING these days” may be all too familiar for Canadian attorneys. Unfortunately, many in-house attorneys fail to purchase lawyers professional liability insurance to protect themselves against potential lawsuits. Even though most claims are brought on by clients, employed lawyers can also be subject to suits from third parties, such as employees, shareholders, government agencies, and other entities.

Lawyers Professional Liability Insurance
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5 Common Risks Facing In-House Lawyers

  1. Lawyers at private companies face exposures when performing contract negotiations, giving advice to Human Resources professionals, assisting with mergers, reviewing contractual language, etc.
  2. Since electronic information is discoverable, it must be stored and preserved just like paper documents once were. In-house lawyers should work with IT professionals to ensure compliance with this rule.
  3. Clients may sue over a contract that did not work in their favour which the attorney had a hand in writing.
  4. A terminated employee may sue the employer and name the attorney for negligence.
  5. Lawyers are at risk when performing moonlighting services or pro-bono work.

Lawyers Professional Liability Insurance Coverage

A typical lawyers professional liability insurance policy may feature the following:

  • Protection from demands, suits or proceedings for damages or injunctive relief.
  • Policy may be written as either a “claims made” or “claims made and reported” and on a “duty to defend” or “non-duty to defend” basis.
  • Responds to licensing proceedings for in-house attorneys to practice law.
  • It provides defence against claims alleging wrongful acts. Wrongful acts and claim definitions are expanded and broad.
  • Extends to pro-bono or moonlighting work done by in-house lawyers.
  • Includes full-time on-staff attorneys and contract and independent contract lawyers and support staff members.
  • Advance of defence costs, even if allegations are found to be groundless.
  • Coverage extends globally.
  • Coverage for non-client claims.
  • Coverage for regulatory claims.
  • Punitive damages coverage.
  • Covers claims from coworkers that arise out of the attorney’s work at the organization.
  • Covers costs for claims brought by the employer, board of directors, and officers.


Do lawyers have E&O insurance?

Yes, lawyers need E&O insurance. E&O insurance stands for errors and omissions insurance, otherwise known as professional liability insurance. It protects lawyers and law firms against claims of malpractice, errors, misconduct, and negligence. All industries, such as technology, finance, and real estate, hire lawyers. Individuals also hire them to help with legal matters in a personal capacity. Since lawyers provide professional services for a fee, such as legal proceedings and advice, they should have errors and omissions insurance.

E&O insurance helps lawyers mitigate some of the financial risk and loss of practicing law, whether in a law firm or independently. For example, a client hires a lawyer to draft a business contract between two companies and claims that the lawyer made an error in writing the contract. Your business has financial protection against the settlement and legal defence expenses to help reduce financial risk and loss.

Do lawyers get insurance?

Insurance is available for lawyers, and they should purchase comprehensive lawyers’ professional liability insurance packages. Whether you’re covered under your law firm’s insurance package or have your own lawyers’ professional liability insurance policy, it helps mitigate the financial risks and potential losses of operating a law firm. You might run into unexpected natural events that leave your law firm partially or completely in need of repairs. It could through your business of its schedule while waiting for the office to be rebuilt. Your law firm could also receive a third-party liability claim or lawsuit alleging business mistakes, injury, or property damage.

In any of these cases, there are expenses related to resolving these claims and lawsuits. Without a comprehensive insurance policy, your business will have to come up with the money on its own, which could lead to substantial financial loss. Insurance protects your law firm by helping with these expenses, up to the insurance coverage limit. In addition to E&O insurance, you might also need general liability insurance, commercial auto insurance, and cyber liability insurance.

How does lawyer insurance work?

Whenever there’s a lawsuit, office damage, or another type of financial loss resulting from unexpected events or third-party liability claims, you can file a claim with your insurance company. The insurance company will consider facts like the reason for the claim, the parties involved, what happened, the amount of damage done, and the cost of the damage. They’ll help with some of the incurred expenses up to the coverage limit.

Talk To Us About Your Professional Liability Options

To learn more about excess lawyers professional liability, talk to an ALIGNED advocate today about how we can help you secure the best insurance products, services, and solutions. Wherever you are located, we can help you get an insurance quote that delivers more value and options.

We’re ALIGNED Across Canada   100% Canadian owned, ALIGNED is a premiere insurance brokerage that serves small, medium, and large organizations. ALIGNED’s offices in Toronto, Calgary, and Vancouver are supported by a national operations centre in Cambridge, Ontario. As one of Canada’s fastest-growing insurance brokerages, we invite you to learn more about us and connect @ALIGNEDonRisk, on Facebook or LinkedIn.

Sources: Adapted from Coverage Insights © 2011-13 Zywave, Inc. All rights reserved.  This Coverage Insights is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel or an insurance professional for appropriate advice.

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