Monday, June 30, 2014

Printable Version

In this issue:
• Majority of Alberta Lawyers Prefer an Insurance Deductible
• Trust Safety Insurance Coverage - Part B

Majority of Alberta Lawyers Prefer an Insurance Deductible

$5,000 deductible on all new claims beginning
July 1, 2014

A recent survey of insured Alberta lawyers showed 73% of respondents support the re-introduction of the insurance deductible. After inviting feedback from the profession, the Alberta Lawyers Insurance Association (ALIA) has decided to re-implement a $5,000 deductible, beginning July 1, 2014 on all professional liability claims submitted to the Alberta Lawyers Insurance Exchange.

The decision has been made with a view to reducing the insurance levy all insured lawyers must pay over time. Saving the profession an average of $1 million in annual claims costs and practically allocating risk enables ALIA to provide a flexible, efficient and cost effective insurance option.

Quick FAQs on Deductibles: 

1. What is the deductible used for? 

This amount will apply toward defence costs, should defence counsel be necessary, and towards the payment of damages an insured lawyer may be liable to pay.

2. What if the amount claimed is less than the deductible? 

The claim may be paid out of the deductible.

3. When is the deductible payable? 

The deductible shall be paid upon ALIA incurring $5,000 in defence costs or damages.

4. Does the deductible need to be paid if the claim is successfully defended? 

Yes. If there are defence costs incurred, the insured lawyer is expected to share in those costs.

5. Is the deductible retroactive? 

No.

6. If I have a potential claim, isn’t it cheaper for me to settle privately before reporting it? 

It is a condition of your entitlement to coverage under the Policy that all claims and potential claims be reported promptly. Whether or not the claim may be settled within the deductible amount, all claims must be reported. ALIA can then assist the lawyer in resolving the matter.

Trust Safety Insurance Coverage - Part B

Beginning July 1, 2014, with the establishment of ALIEX, we are also able to add Trust Safety Insurance coverage to respond to claims previously made against the Assurance Fund. Under the existing Assurance Fund model, all claims made by members of the public following the misappropriation of trust funds must be adjudicated in a three party, adversarial process involving the claimant, the responsible lawyer and the Law Society. The process is rigid, time consuming, complex and isolating for the public.

In striving toward its vision to be a model for protecting the public interest and preserving the fundamental principles of justice through an independently regulated and trusted legal profession, the Law Society has developed a new model for responding to trust theft claims as a corollary to its Trust Safety Program introduced in 2011. The Trust Safety Insurance model will allow us to investigate and more responsively settle legitimate claims and to defend innocent insured lawyers where necessary. Where a payment is made under the Trust Safety Insurance part of the policy, the insurer has the right to recover all losses and defence costs paid from the lawyer responsible for the theft. Annual aggregate coverage limits, policy exclusions and applicable limitations periods provide improved certainty in relation to the scope of the protection available and ensure long-term sustainability of the fund.

Levy Refunds and Retiring Lawyers

Beginning this policy year, ALIA has ended the practice of issuing pro-rated refunds. For those lawyers who anticipate possible retirement this policy year, the option is available to pay the first of two installments. Should the lawyer become inactive before the second installment is due (January 5, 2015) they will not be required to pay the second installment. 

For more information, please contact our Membership department.

The Move to ALIEX

To learn more about the Alberta Lawyers Insurance Exchange, click here.

www.lawsociety.ab.ca
Law Society of Alberta
Calgary Office
Suite 500, 919 11th Avenue SW
Calgary, Alberta T2R 1P3
Phone: 403-229-4700

Edmonton Office
Suite 800, Bell Tower
10104-103 Avenue
Edmonton, Alberta T5J 0H8
Phone: 780-429-3343

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