In this issue:
• 2009 Insurance Levy Due June 30, 2009
• What is the 2009/2010 Insurance Levy?
• New Type of Fraud Identified in Ontario
• Consider Purchasing Excess Coverage
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2009 Insurance Levy Due June 30, 2009
If you have not yet received an invoice for your 2009 Professional Liability Insurance Levy, please contact Rachel Lor, Acting Membership Coordinator for the Law Society of Alberta, at 403-229-4718 immediately.
Payments may be made in two instalments as indicated on the insurance invoice mailed earlier to lawyers.
Please note:
• Lawyers with paid claims in the past five years will pay surcharges in addition to the set levy.
Depending on the number of paid claims on their record in the past five years, lawyers may be required to pay surcharges of 30%, 70% and higher.
• Lawyers exempt from the levy must complete an exemption form and return it to the Law Society’s Membership Department before the June 30, 2009 deadline.
Exempt active lawyers are insured at no charge for Pro Bono services provided through:
- Volunteer Lawyers Services program,
- Calgary Legal Guidance,
- Edmonton Community Legal Centre,
- Central Alberta Community Legal Clinic,
- Lethbridge Legal Guidance,
- Children’s Legal and Educational Resource Centre, or
- Grande Prairie Legal Guidance.
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What is the 2009/2010 Insurance Levy?
For each lawyer, the 2009/2010 insurance levy has been set at $2,600 plus GST.
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New Type of Fraud Identified in Ontario
A new type of fraud has been identified in Ontario that seems to work like this:
A new and previously unknown client or lender contact allegedly from a major bank will ask you to act on mortgage matter. The source of the referral will be unknown to you (i.e. a person you don’t know or recognize). Shortly thereafter, you will receive mortgage instructions, and a legitimate-looking bank draft drawn on a major bank. Loan amounts to date range from $640,000 to $685,000. Client will be in a rush to complete the deal.
Fraud is a real and growing problem for all law firms and their staff. Each year, fraudsters "trick" dozens of law clerks and lawyers, young and old, in practices large and small, into helping make fraud happen.
The Law Society of Alberta introduced new "know-your-client" identification and verification rules. They are available at www.lawsociety.ab.ca
For more details on LawPro's fraud alert, visit: www.practicepro.ca/practice/pdf/Fraudblast.pdf or www.lawpro.ca
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Consider Purchasing Excess Coverage
The LSA recommends that firms consider purchasing excess coverage for additional protection. As the value of client matters and transactions increases over time, so does the need to secure adequate levels of errors and omissions insurance.
The rates for July 1, 2009 are as follows:
Limits $1M xs $1M - $396 CLIA
Limits $2M xs $1M - $581 CLIA
Limits $3M xs $1M- $679 CLIA
Limits $4M xs $1M - $720 CLIA
Limits $9M xs $1M - $1,008 CLIA
There may be further reductions if claims experience at June 30, 2009 allows for a distribution of existing profit-sharing coming out of prior years. Please 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 Voluntary Excess Program, either as a sole practitioner or as a member of a firm.
Applications are available on the Canadian Lawyers Insurance Association (CLIA) website at www.clia.ca or by calling Beatriz Mascardo at ALIA (403) 229-4756 or 1-800-661-1694.
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ALIA Celebrates 20th Anniversary
Given the diverse and complex business environment today in Alberta, it is difficult to believe that less than 50 years ago, there was no mandatory liability insurance program for Alberta lawyers.
Canadian law societies are both the professional regulatory body and the professional insurance association for lawyers. The LSA became the first Law Society in Canada to provide to lawyers a mandatory group professional liability program.
While these early plans, offered through commercial providers, had served the profession well, it became apparent that they were vulnerable to fluctuations in the insurance market.
In 1987, a group of Alberta practitioners began advocating for a national lawyers insurance program that would make the profession indirectly self insuring, or at the least, provide a competitive purchasing alternative.
At that time, a study was conducted by the Federation of Law Societies of Canada and the CBA to explore and seek more effective alternatives to the status quo. One option was to establish a reciprocal insurance exchange, a form of unincorporated insurance company in which subscribers exchange policies.
The Canadian Lawyers Insurance Association was formed involving seven provinces, including Alberta. In 1988, all legal hurdles involving CLIA were cleared.
The LSA created the Alberta Lawyers Public Protection Association (ALPPA) to administer the group professional liability insurance program. In July 1999, the ALPPA changed its name to become the Alberta Lawyers Insurance Association.
For the first time, stable and fair rates and a permanent source of coverage were now within reach.
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What is ALIA?
ALIA is a separate corporate entity from the Law Society of Alberta. ALIA is not an insurance company. It is a member of the reciprocal insurance exchange called the Canadian Lawyers Insurance Association (CLIA). On behalf of the CLIA and the LSA, ALIA handles all claims against insured Alberta lawyers.
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