Professional Liability Insurance for Paralegals is an important requirement by provincial law societies in Canada.
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Insurance for paralegals
From preparing legal documents to conducting research, paralegals play a critical role in the administration of justice. However, like anyone providing a service or offering advice to the public, there is room for risk. A document error, misrepresentation, or financial loss due to your advice could result in a costly lawsuit for you or your firm.
Whether you practice at a local law firm or take on clients, carrying professional liability insurance is critical to your success in the legal system.
At Zensurance, our mission is to make insurance as accessible as possible. We wrote this guide to help you navigate the basics of paralegal liability insurance.
What is paralegal insurance?
Like most legal service providers, paralegals practice judicially. However, a disgruntled client or preparation oversight could result in a situation where you are the subject of a lawsuit.
Our Paralegal insurance provides comprehensive protection against the specific risks of offering legal services, including negligence and malpractice, and meets all Canadian Law Societies’ requirements.
What does it cover?
All paralegals practicing in Canada require professional liability insurance.
Professional Liability Insurance, also known as Errors & Omissions (E&O) Insurance, protects legal services professionals against claims or lawsuits alleging financial loss due to a service you provided, negligence, misconduct, or failure to deliver services as promised.
Professional Liability Insurance covers your legal defense costs, as well as monetary judgments and settlement fees up to your policy limit. It does not cover deliberate misrepresentation or criminal acts.
Paralegals typically opt for “claims-made” professional liability insurance policies, which cover claims that both occur and are reported during the policy coverage period. Policies that cover claims made outside of the policy period are called ‘occurrence-made’ and cover the claim regardless of when it is reported.
Additional coverage is recommended for paralegals who run a business or offer their services to multiple firms. Comprehensive coverage for paralegals typical includes the following coverage:
- Commercial General Liability Insurance (CGL), also known informally as ‘slip and fall insurance,’ CGL protects you from the everyday risks you can expect to encounter during day-to-day business operations, including third-party property damage or bodily injuries.
- Cyber Liability Insurance is essential for anyone who stores client information or confidential data. It covers costs associated with cybercrime involving your technology systems and customer data, such as incident response and breach management fees.
Coverage may vary based on several factors, such as the services you provide and experience. Our specialized team of brokers could ensure you receive the most comprehensive coverage.
Do paralegals need insurance?
Law societies across Canada require paralegals who provide legal services to the public to carry Professional Liability Insurance (also known as Errors & Omissions) with a minimum limit of $1M.
In some provinces (e.g., Ontario), paralegals who provide legal services on behalf of a lawyer or law firm are covered by their professional liability insurance. Please note, you are not personally insured under the policy; instead, you are covered should a suit against a lawyer include your services.
Carrying liability insurance ensures you are protected should you be personally named in a claim or lawsuit. It also provides protection should you take on clients or work with multiple lawyers/law firms.
For more information on insurance requirements for paralegals, check with your federal or provincial paralegal association:
A note on regulation, to date, Ontario is the only Canadian province regulating paralegals. However, carry insurance will become even more critical as more provinces move to regulate the profession.
How much does it cost?
The cost of liability insurance for paralegals will vary based on several factors:
- Training and Experience
- Annual and Projected Revenue
- Services Provided
When you start our online application, we will ask some questions to understand your coverage needs better.
We’ve partnered with over fifty insurance providers to offer you different options that suit your business needs at the best price.
Common claims scenarios
Problem: A client retaining your services after a car accident sues the at-fault driver for the collision as per your advice. However, upon doing so, your client discovers the lawsuit cannot proceed because it was after the limitation period to do so. Your client sues you for failing to advise them of the deadline to file a lawsuit against the at-fault driver.
Outcome: Your professional liability insurance may cover the cost of your legal expenses and the outcome of the third-party lawsuit against you.
Problem: An accidental data breach occurs in your office after a colleague inadvertently shares confidential client information with outside parties. Your affected clients sue for third-party damages.
Outcome: Your cyber liability insurance may cover your legal defence fees, any court-ordered settlement, financial support to notify your clients of the breach, and credit monitoring services for your affected clients.
Problem: A client visiting your office falls and is injured on your premises. After receiving medical attention, they sue you for third-party bodily injury.
Outcome: Your commercial general liability insurance may cover your client’s medical expenses, your legal fees, and any monetary settlement ordered by the court.
Frequently asked questions
A claims-made policy is one that protects you from allegations or claims made while your policy is active, regardless of when the insurable incident occurred. An occurrence policy provides coverage as long as you were insured when the incident occurred.
The law firm I work at has an insurance policy. As an employed paralegal, do I need my own insurance?
Yes. Even though the law firm where you work is insured, that policy may not cover you from allegations of wrongdoing or a third-party lawsuit. It is advisable to speak to a licensed broker to ensure there are no gaps in your coverage and ensure you are protected from allegations of negligence or errors with a professional liability policy.
It depends. During your insurance application, it needs to be determined in which provinces you are licensed to practice. If you are working from a location outside of Canada, such as in the United States, talk to one of our licensed brokers to ensure your policy includes coverage for working in another country.
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