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LAWPRO’s mandatory professional liability insurance: What you need to know
These FAQs answer some of the common questions we hear from new lawyers. The answers will help you determine if you need insurance coverage (or whether you’re exempt) and which steps you need to take to get your LAWPRO insurance coverage in place
What is professional liability insurance?
Professional liability insurance protects lawyers if a client suffers a loss because of something the lawyer did wrong. For this reason, only lawyers who work in private practice (have clients) are required to have this insurance.
What is private practice?
Private practice, for the purpose of LAWPRO’s insurance program, is the delivery of professional services (including advice) to anybody who is not the lawyer’s employer. In general, lawyers in private practice perform professional services for clients for pay. Note as well, providing legal advice or help to family or friends, or providing free legal advice to pro bono clients also falls within the definition of private practice.
Do all members of the Ontario Bar have to purchase professional liability insurance?
If you are engaged in private practice in Ontario, you will need to purchase coverage through LAWPRO. If you are not in private practice and meet certain criteria, you are likely exempt from the mandatory insurance requirement.
Going into private practice
How do I apply
If you will be working as a sole practitioner, you will need to complete an application online. New lawyers can apply at any time after receiving a Law Society number from the Law Society of Ontario. While it’s important to apply promptly for insurance, you do NOT need to delay beginning to practise. You can begin the practice of law immediately while you wait to receive your number, with one exception: if you intend to practise real estate law, you must wait until your compulsory Real Estate Practice Coverage Option (REPCO) coverage is in place to do so. After the first year, you will be asked, each fall, to renew your insurance for the following year.
If you’ll be joining a firm, you may want to speak with the firm administrator or office manager before you apply directly, as there may be specific practice or payment options that need to be reflected on your application form.
How much will it cost?
Not every lawyer in private practice pays the same premium. LAWPRO offers discounts to certain categories of lawyers (including part-time practitioners, and lawyers who practise criminal and/or immigration law exclusively).
New lawyers receive a discount: Lawyers new to the Bar in the current year receive a 50% discount from the standard base rate in their first full year of practice. Additional discounts are available in the second, third, and fourth years (40, 30, and 20%, respectively). New lawyers who practise for less than 200 days in their first year will be eligible for a “first year” discount in both their first and second years of practice. These discounts reflect the risk profile of new lawyers. Because the maximum premium discount for any lawyer is 50%, these discounts cannot be combined with other discounts.
Some lawyers pay more than the base premium. For example, there is an additional premium required for the practice of real estate law (a higher-risk practice area, from a claims perspective). Also, lawyers for whom LAWPRO has paid claims within the previous five years may pay more for their insurance because of these prior claims.
Not going into private practice
What kinds of lawyers are exempt from the mandatory insurance requirement?
In general, lawyers working as in-house counsel, who are employed by the government, who work in education, or who work for a clinic funded by Legal Aid
Ontario are exempt from the requirement to buy insurance. Lawyers who do pro bono work that meets certain criteria, or who are on temporary leave, may also be exempt.
If I’m not going into private practice, can I just forget about insurance?
No. The Law Society of Ontario requires that ALL members of the Bar (not just those in private practice) confirm their practice status every year. This means that you must either pay for insurance, or file an application for exemption from the insurance requirement. Go to lawpro.ca to complete these steps online.
What happens if I meet the general criteria for exemption, but later find myself providing legal advice to someone other than my employer, or handling a legal matter for a family member or friend?
Anytime you provide professional services, you expose yourself to a potential claim. Even if you are not in full-time private practice, if you contemplate providing even occasional legal advice or services, you will need to purchase insurance coverage (there are a few narrow exceptions, including one for certain kinds of pro bono work). Visit lawpro.ca for details