A paralegal who is licensed by the Law Society of Ontario is required to carry professional liability insurance if they are providing legal services. Section 12 of By-Law 6 outlines the minimum insurance requirements:
- A policy limit for each single claim of not less than $1 million and an aggregate policy limit for all claims of not less than $2 million per year.
- A maximum deductible amount under the policy that is reasonable in relation to the financial resources of the licensee.
- Coverage for liability for errors, omissions and negligent acts arising out of the provision by the licensee of legal services authorized under a Class P1 licence.
- A provision granting an extended reporting period of ninety days from the date of cancellation of the policy.
- A provision naming the Society as an additional insured, for the purposes of reporting claims and receiving notice of the cancellation or amendment of the policy.
- A provision that the policy may not be cancelled or amended without at least 60 days written notice to the Society.
However, many licensed paralegals do not have insurance as there are exceptions to this requirement. This could include:
- Not providing legal services
Many paralegals who are licensed do not actually provide legal services. They may be working as an administrative assistant, law clerk, or manager were providing legal services is not part of their job description. Their status with the Law Society, in this case, would be Employed but not providing legal services.
- Working under the direct supervision of a lawyer
If a paralegal is employed at a law firm and working under a lawyer, they are not required to hold insurance as they are covered under the lawyer’s professional liability insurance. As lawyers are responsible for those they supervise, if a claim is made it would most likely be against the firm or lawyer, not those who they delegate to. It is worth noting though that in this scenario, there would be no coverage for the paralegals personal defense. Depending on the nature of the work, though the paralegal is not required to have insurance, it may be in their best interest to still have coverage.
- Paralegals who are unemployed
If a licensed paralegal is unemployed, they are not required to have insurance as there is no reason for them to have insurance. For example, some paralegals become licensed and then decide to continue their education. If they are an unemployed student, no insurance coverage is needed.
One very important detail to note: If a claim is brought against a paralegal, the insurer will only cover the paralegal if they had an insurance policy during the event AND at the time the claim was made. Therefore, having a gap in professional liability insurance coverage could create the risk of exposure.
As a licensed paralegal providing legal services, I am insured under PROLINK Insurance Inc. If you are interested in working with me but have questions about insurance, feel free to visit their website or contact me directly. I am happy to be transparent about my coverage.
For more information on paralegal insurance visit the Law Society of Ontario By-Law 6.
Written by Rebecca B. Tripp
Originally posted on August 28, 2020
Updated October 13, 2020
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