Past Economic Crisis Continues to Affect Insurance Program
By Anne Kirker, QC, Bencher and Chair, Insurance Committee and Lisa Sabo, Director, Alberta Lawyers Insurance Association
Insurance Levy set for 2012/2013 Year
The Benchers have approved the ALIA Insurance Levy for insured lawyers in the amount of $3,300 plus GST for the 2012/2013 policy year.
In 2011, the Alberta Lawyers Insurance Association (ALIA) continued to feel the adverse effects of the 2008 economic crisis. An above-average number of claims were received while the organization strived to fulfill its goal of becoming a model insurance program in alignment with the Law Society of Alberta’s vision of becoming a model regulator.
ALIA has continued to see increased claims in the real estate area, where the claims volume doubled between 2008 and 2010. While those numbers have started to come back down, the reduction in real estate claims was offset in 2011 by an increased number of claims in matrimonial and family law, as well as estate planning and administration. The insurance levy represents an actuarial calculation of funds necessary to cover claims costs for the coming year and includes the premium paid to CLIA of $828 per insured lawyer. The levy is also impacted by ALIA’s return on investments which has also been impacted by the economic downturn, resulting in less available money to subsidize the insurance levy. The combined effect of increased claim costs and loss in investment income has resulted in the modest increase in the insurance levy paid by all Alberta lawyers in private practice.
Payment Due on July 3, 2012
The levy is due July 3, 2012. Payments may be made in two installments. This will be indicated on the insurance invoice which will soon be mailed to lawyers.
Please note that lawyers who have paid claims in the past five years will pay surcharges in addition to the set levy.
Exemptions from the Levy
Exempt active lawyers are insured at no charge for Pro Bono services provided through:
• Volunteer Lawyers Services program,
• Calgary Legal Guidance,
• the Edmonton Community Legal Centre,
• the Central Alberta Community Legal Clinic,
• Lethbridge Legal Guidance,
• the Children’s Legal and Education Resource Centre, or
• Grande Prairie Legal Guidance.
Purchasing excess coverage
The Law Society also recommends that firms consider purchasing excess coverage for additional protection.
Applications are available on the Canadian Lawyers Insurance Association (CLIA) website at www.clia.ca or by calling Melissa Laslo at ALIA at 403-930-7211 or 1-800-661-1694.
As the value of client matters and transactions increases over time, so does the need to secure adequate levels of errors and omissions insurance.
Note on Claims Reporting:
It is strongly recommended by ALIA that practitioners take steps to prevent claims. Preventing claims remains the most effective way of controlling costs of the insurance program.
Missed limitation claims continue to be a steady area for claims reported to ALIA. Frequent errors are found in a failure to enter the limitation date in the firm’s system or a mistake in entering the date. It is important for all individuals involved in a file to ensure important dates have been entered into the firm’s limitation system.
It is a requirement of the ALIA policy that all claims or potential claims be reported to ALIA during the policy period. Please ensure that any claims or potential claims are reported to ALIA on or before June 30, 2012.
Be Aware of Fraud
Please continue to check the Law Society website and read the EBulletins and Advisories for information on fraud and how to prevent fraud. If you have been targeted by any fraud scams, please send an email to ReportingFraud@lawsociety.ab.ca.