Understanding The Significance Of E&O Insurance For Ontario Attorneys
As an attorney in the area of Ontario, you will easily be able to find a wealth of potential customers. Ontario experiences a large number of lawsuits each and every year. This will be a good thing for attorneys, but it is also important to realize that you too could become a defendant in a lawsuit. If your client feels that they were insufficiently or improperly misrepresented by your firm, you may find yourself in a court of law. With this in mind, it is absolutely pertinent to protect your company by obtaining an adequate amount of errors and omissions insurance. Below, you will learn about E&O insurance for Ontario attorneys.
Is It A Necessity?
You probably consider yourself to be the best attorney in the Ontario area. At the same time, you probably go above and beyond to keep your clients satisfied and content. Nonetheless, it is important to remember that you do not have control of the future. Some individuals are never satisfied and therefore you will always be at risk of being sued by a former client. Whether you’re working with a law firm or you have your own firm, a lawsuit could put you a terrible situation.
With this in mind, the answer is simple. Yes. Errors and omissions insurance is a necessity for all Ontario attorneys. While the monthly or annual costs might be substantial, they could help prevent your company from being forced into bankruptcy. And of course, there are ways to decrease the costs.
Getting Prior Acts Coverage
Believe it or not, a lot of Ontario attorneys will not get E&O insurance in the beginning. This can be very risky, but it is still possible to protect yourself for prior acts. If you’ve worked with a client in the past, you can still obtain protection for that specific case. This can be done by signing up for E&O insurance and getting additional prior acts coverage. This features is available from various insurance providers in Ontario, including Aviva and Llyods of London.
How does it work? Well, conventional E&O insurance will only offer you protection from the beginning of the coverage to the end. With Prior Acts Coverage, you will also be able to protect yourself for prior acts. Just take note that you will not be able to obtain coverage, after a lawsuit has already been filed! This is why it is best for attorneys to get coverage as quickly as possible.
Predecessor Firm Coverage
Many attorneys will shift from one law firm to the next throughout the course of their careers. Even after you’ve switched to a new firm, there will still be a possibility that a client from a previous firm could file a lawsuit against you. It is best to make sure that your insurance policy will be able to protect you from these types of complaints. This will generally be referred to as Predecessor Firm Coverage. While it may increase the overall cost to some degree, it will prove to be well worth it.
The Impact Of Firm Size
When attempting to acquire errors and omissions insurance for your business, you will quickly discover that various factors will play a major role in the types of policies available to you. If you own a law firm with thirty or forty employees, you will be required to pay more than a firm with only ten lawyers. It may be a little more difficult to obtain coverage, if you have a substantial number of employees. Each employee is considered an extra risk and therefore you’ll be required to pay a little more for each.
Your Area Of Expertise
Lawyers are very diverse. Some will specialize in tax law, while others will work directly with criminal defendants. It should be known that your specific area of expertise will be very important, when it comes to obtaining E&O insurance. Some specific areas tend to experience many more lawsuits than others. If you work in a higher risk area, you can guarantee that you’ll have a tougher time getting the insurance that is needed. At the same time, you need to realize that lawyers working in high-risk areas will be required to pay more than others.
What Will It Pay?
There are truly various reasons that E&O insurance is so incredibly important. This insurance can help to keep your company afloat, while giving you the ability to avoid an untimely bankruptcy. This is the case, because errors and omissions insurance will help you fight a lawsuit filed by a previous client. When the complaint has been filed, the E&O coverage will enter the picture. From there, the insurance will cover your legal costs. This will include court fees and charges associated with your legal defense.
If you lose the case and are forced to pay the client a large amount, the E&O insurance will help. Also, some policies will give you a daily allowance for each day you’re forced to show up in court. This type of coverage can truly be a lifeline for you, your family and the lawyers with your firm.
When E&O Insurance Will Help
Errors and omissions insurance will prove to be very beneficial for many attorneys. This type of insurance is capable of protecting you and your firm in the event of an error. In fact, the risks for attorneys has increased substantially over the past few years. Attorneys in all areas will face some degree of risk. Below, you will discover some of the specific scenarios when errors and omissions insurance will prove to be very important.
Long Work Hours Are Risky
Law services are always in high demand, because Ontario citizens find themselves in compromising positions every day. Being an attorney means giving up some of your precious off time and dedicating it to clients. Long hours on the other hand means that you are putting your firm at risk of negligence. Clients expect to have their case treated with the utmost respect and it is up to the attorney to ensure the client that the judge and jury find in their favor.
Claims of negligence are something that an attorney needs to avoid at all costs. If a client feels the attorney breached their contract or displayed negligence in some way, they may just threaten the attorney with a lawsuit. Working extended hours day in and day out will definitely put the attorney at risk of neglecting or abandoning a case. Now, this may not be something that the attorney meant to do, but only that it just happened.
Whatever the case may be, you cannot explain this away. Instead, you will be forced into a civil suit. If you are covered under an active errors and omissions policy, you will be provided with the finances to offer the client a settlement out of court. The E&O insurance will pay for this expense, along with the lawyers to build a defense team. If you are not protected under an E&O insurance policy, you may potentially need to pay out of pocket for this expense or battle the claim out in an Ontario court of law.
Disgruntled Client
As a business owner, you already know that it is impossible to please ever customer. Regardless, of the extra steps that you and your employees take to make the customer happy he or she is still intent on filing a lawsuit against you. There are tons of schemers in the world that will just jump at the chance to file a frivolous lawsuit, if they think it will award them a little bit of money.
This is why it is always important that you and your company are protected from these frivolous claims. Even in the lawsuit is groundless and you are proven not at fault in the court of law just imagine all the time and money that you will have spent in court. Error and omissions insurance can protect you even if the lawsuit is groundless. The insurance will cover the cost of your defense attorney, as well as any court costs that might arise during the dispute.
Breach Of Confidentially
Attorneys are responsible for their clients’ personal information. As a graduate from a reputable law school, you know the importance of keeping this information safe and out of the hands of hackers. While it is easy to keep the data stored in your office, without concerns of someone breaking into your establishment and stealing it, storing it on a computer will always be riskier. However, most attorneys conduct a large portion of their business operations online, making it even more difficult to keep the data out of the sticky hands of a hacker.
There are also risks, when speaking to another professional, law enforcement officer or federal authorities about a specific case. Clients are notable for alleging their attorney spoke out of term to an authorized person, without their permission. The tort of breach of confidence law protects all private information that is conveyed in confidence. A breach of confidentiality could arise, when a lawyer discloses information that was previously agreed upon to keep private.
If one of your clients alleges you shared their confidential information with an unauthorized person, they may file a lawsuit against you or your business. In this case, the errors and omissions insurance policy will provide you with the means to settle out of court or build a defense team of lawyers that will represent you throughout the lawsuit.
Illegal Acts Are Not Covered
While errors and omissions insurance can be very beneficial, it is not a miracle solution. In fact, some specific behaviors will not be covered by E&O insurance. This is true, when it comes to illegal acts. If you have been sued for breaking the law, your errors and omissions insurance will not do you any good! However, if you made a mistake, you may be protected. Carrying out illegal acts intentionally will void your coverage.
