Trust shortage liability insurance for reliance on fraudulent certified cheques (Part C)
Lawyers can take steps to reduce or eliminate the risk of falling victim to the "bad cheque" scam." However, if a lawyer is caught, trust shortage liability insurance provides some protection, helping ensure that clients who have placed funds in trust with that lawyer do not suffer a financial loss.
The insurance provides a limit of $500,000 per claim, and per lawyer and firm annually, a profession-wide annual aggregate of $2 million, and a deductible of 35% of the client trust fund shortage (reduced by the amount of any overdraft). Coverage is contingent upon compliance with the Law Society’s client identification and verification rules.
More detailed information about the insurance is in the Spring 2012 Insurance Issues: Program Report.