BUSINESS INNOCENT INSURED COVERAGE POLICY
MASTER POLICY BIIC 11-01-01
ON FILE WITH THE COMPANY
THE LSBC CAPTIVE INSURANCE COMPANY LTD.
Administrative Offices, 5th Floor, 845 Cambie Street
Vancouver, B.C. V6B 4Z9
THE LAW SOCIETY OF BRITISH COLUMBIA
(the "Law Society")
JARDINE LLOYD THOMPSON CANADA INC.
|1.||Business Innocent Insureds of Insured Firm||As per Certificate Holders.|
|Policy Period||From January 1, 2011 to January 1, 2012 (12:01 a.m. standard time) or any part thereof.|
|Schedule of Related
|B.C. Lawyers’ Compulsory Professional Liability Insurance Policy Number LPL 11-01-01 issued by the Company and any other Professional Liability Insurance enuring to the benefit of any Business Innocent Insured hereunder, except Part B of the B.C. Lawyers’ Compulsory Professional Liability Insurance Policy Number LPL 11-01-01.|
|4.||Limits of Liability including
damages, claims expenses
|(a) $1,000,000||All claims arising out of an error.|
|(b) $2,000,000||Annual Aggregate Limit.|
|5.||Deductible||10% of the total amount of damages, claims expenses or both with respect to each error that results in the payment of damages, claims expenses or both under this policy.|
|6.||Premium||$300 annually per lawyer insured under Part A of the Compulsory Policy who is a member of the Insured Firm at the inception date of the Certificate issued.|
This policy governs business-related professional liability claims
For convenience, all defined words are in bold print. We, us or our refers to the Company. Except as set out in this policy, the Definitions applicable to Part A of the Compulsory Policy apply to this policy. In this policy:
Business-related professional liability claim means: a claim for damages that would be covered under Part A of the Individual Insured’s Compulsory Policy but for the application of Exclusion 6.2 of the Compulsory Policy.
Compulsory Policy means: the Compulsory Professional Liability Insurance Policy issued to members of the Law Society by the Company in force at the same time as this policy.
Business Innocent Insureds means: those Additional Insureds against whom a business-related professional liability claim is or may be brought and who are excluded from coverage under Part A of the Individual Insured’s Compulsory Policy as a result of the application of Exclusion 6.2 and Insuring Agreement A 3.4 of the Compulsory Policy and who, at the time the Individual Insured was performing the professional services giving rise to the claim:
(a) were at the Insured Firm;
(b) had paid the annual insurance fee for the Compulsory Professional Liability Insurance Policy issued to members of the Law Society by the Company;
(c) had no knowledge of the circumstances giving rise to the application of Exclusion 6.2 to the Individual Insured; and
(d) had exercised due diligence in accordance with Condition 3 of this policy.
Insured Firm means: the firm named in Declaration 1.
In consideration of the payment of the premium by the Insured Firm and in reliance upon the statements of any application(s) for this insurance, and subject to the limits of liability, exclusions, conditions, endorsements and all other terms of this policy, the Company agrees:
1. INSURING AGREEMENT 1
We shall pay all sums that the Business Innocent Insureds become legally obligated to pay as damages because of any business-related professional liability claim provided that such claim is reported to us during the policy period and that the error giving rise to such claim occurs during the policy period or during the policy period of any prior policy held by the Insured Firm providing coverage for business-related professional liability claims.
2. INSURING AGREEMENT 2
2.1 With respect to any claim first made or suit first brought within Canada or the United States of America seeking damages for which the Business Innocent Insureds are entitled to indemnity under this policy, we shall have the right:
2.1.1 and the duty to defend any suit against the Business Innocent Insureds, even if any of the allegations of the suit are groundless, false or fraudulent; and
2.1.2 to select and instruct defence counsel and to investigate and settle any claim including the right to elicit, or instruct defence counsel to elicit, offers of settlement. If the Business Innocent Insureds object to any settlement recommended by us, we may:
(a) settle the claim without the Business Innocent Insureds ’ consent and the Business Innocent Insureds will remain liable to pay the deductible stated in Declaration 5; or
(b) give the Business Innocent Insureds the right to negotiate or defend the claim or suit. In this event, any duty we may have had to defend the claim ceases and the damages and claims expenses in excess of the amount for which we could have settled will not be recoverable under this policy.
2.2 With respect to any claim that is made or suit that is brought elsewhere than within Canada or the United States of America seeking damages for which the Business Innocent Insureds are entitled to indemnity under this policy:
2.2.1 we shall have the right, but not the duty, to investigate, settle, defend or pay claims expenses in accordance with Insuring Agreement 2.1.2; and
2.2.2 if we elect not to investigate, settle or defend a claim or suit, the Business Innocent Insureds will, under our supervision, investigate and defend as is reasonably necessary and, if we deem prudent the Business Innocent Insureds will settle such claim or suit. We shall reimburse the Business Innocent Insureds for the reasonable cost of such investigation, settlement or defence.
2.3 Notwithstanding Exclusion 2 of the Compulsory Policy, we shall have the right and the duty to defend, in accordance with Insuring Agreement 2.1.2, any claim first made against the Business Innocent Insureds and reported to us during the policy period arising out of a personal injury while the Business Innocent Insureds were performing or failing to perform professional services for others.
3. INSURING AGREEMENT 3
3.1 This policy is subject to all terms, agreements, limitations and endorsements of and shall follow Part A of the Compulsory Policy in all respects, except as to any provisions to the contrary contained in this policy. Where the terms of this policy provide insurance coverage not otherwise provided by Part A of the Compulsory Policy then this policy shall respond, subject to its terms, agreements, limitations and exclusions, but only for the damages and claims expenses in excess of the deductible stated in Declaration 5.
Insuring Agreement A 3.3 of the Compulsory Policy is not incorporated by reference into this policy.
This policy does not modify or supplement coverage provided by Part B of the Compulsory Policy.
All exclusions contained in the Compulsory Policy that exclude coverage under Part A of the Compulsory Policy are incorporated into this policy with the same force and effect, unless otherwise specified in this policy, and are in addition to the following exclusions.
This policy does not apply to:
1. Errors that occurred prior to January 1, 2002.
2. Claims , errors or any circumstances that the Business Innocent Insureds knew or could have reasonably foreseen might be the basis of a claim prior to the inception date of this policy (or if this policy is part of a series of consecutive renewals issued by the Company, prior to the inception date of the original policy).
1. LIMITS OF LIABILITY
1.1 LIMIT OF LIABILITY — EACH ERROR
1.1.1 The limit of liability stated in Declaration 4(a) shall be the maximum amount payable under this policy for all damages, claims expenses and deductibles for all claims arising out of an error.
1.1.2 If a claim or potential claim is reported to us by or on behalf of any Insured during the policy period, all additional claims or potential claims reported subsequently that arise out of the same error shall be:
- (a) part of the claim or potential claim first made and reported to us; and
- (b) deemed to be reported within this policy period;
and all such claims or potential claims shall be subject to the terms of this policy and to the one limit of liability applicable to the claim or potential claim first reported.
1.2 LIMIT OF LIABILITY — ANNUAL AGGREGATE
1.2.1 The limit of liability stated in Declaration 4(b) is the maximum amount payable under this policy on behalf of all persons insured under this policy for all damages, claims expenses and deductibles arising out of all claims and potential claims first reported during the policy period.
1.2.2 All payments of damages, claims expenses and deductibles reduce the applicable limit of our liability.
1.3 MULTIPLE INSUREDS, CLAIMS OR CLAIMANTS
Notwithstanding any other provision of this policy, one or more claims resulting from an error shall be subject to one limit of liability and shall not increase our limits of liability regardless of whether the error is made by more than one Insured or by Insured(s) acting in more than one capacity and regardless of whether the claims are made against more than one Insured or made by more than one claimant.
1.4 PRIORITY OF PAYMENTS
All claims expenses will be subtracted first from the applicable limit of our liability, with the remainder being the amount available to pay damages.
1.5 EXHAUSTION OF LIMITS
We shall not be obliged to pay any damages or claims expenses, or to undertake or continue the defence of any proceeding after the applicable limit of our liability has been exhausted by payment of damages, claims expenses and deductibles or after deposit of the balance of the applicable limit of our liability in a court of competent jurisdiction. In such a case, we shall have the right to withdraw from the further defence by tendering control of the defence to the Business Innocent Insureds.
1.6 REDUCTION OF LIMITS BY PAYMENTS UNDER RELATED POLICIES
Payments of damages or claim expenses made under the policies referred to in Declaration 3 reduce the limits of coverage under this policy.
2. PREMIUM PROVISIONS
The premium for this policy is payable at the beginning of the policy period. Any additions or deletions from the lawyers at the Insured Firm during the policy period shall not affect the validity of this insurance. The total premium will be calculated by multiplying the rate shown in Declaration 6 by the number of lawyers insured under the Compulsory Policy and expected to be with the Insured Firm at the beginning of the policy period.
3. DUE DILIGENCE
Coverage provided under this policy shall be limited to those Business Innocent Insureds who exercised due diligence in making reasonable and regular inquiries of the Individual Insured that would have disclosed the circumstances giving rise to the application of Exclusion 6.2 under the Compulsory Policy.
By accepting this policy, the Business Innocent Insureds agree:
(a) the statements in the application and the Declarations are accurate and complete;
(b) those statements are based upon representations made by all persons insured under this policy;
(c) this policy has been issued in reliance upon such representations;
but coverage is nevertheless extended under this policy to a Business Innocent Insured who did not make or who did not knowingly permit to be made any false statement in the application.
5.1 If any claims expenses are paid by us, the Business Innocent Insureds will pay the deductible stated in Declaration 5.
5.2 If damages are payable, the Business Innocent Insureds will pay the deductible stated in Declaration 5.
5.3 Our obligation to pay damages or claims expenses applies only to damages and claims expenses in excess of the deductible and we shall be liable only for the difference between the deductible and the limits of liability.
5.4 If we request, the Business Innocent Insureds will make direct payments for damages or claims expenses within the deductible to us or to other parties.
6.1 We may pay damages or claims expenses in excess of the limit of liability or within the deductible and the Business Innocent Insureds will repay such amounts to us on demand.
6.2 If a Business Innocent Insured is not entitled to coverage for a claim because of any term, exclusion or breach of a condition of this policy and we pay damages or claims expenses on behalf of that or any other Business Innocent Insured pursuant to this policy, that Business Innocent Insured will reimburse us for all such amounts.
6.3 If we pay on behalf of two or more Business Innocent Insureds pursuant to Condition 6.1 or 6.2, such Business Innocent Insureds liability to us will be joint and several.
7. NOTICE OF CLAIM OR SUIT
7.1 If any Business Innocent Insured becomes aware of an error or any circumstance which could reasonably be expected to be the basis of a claim, however unmeritorious, that may involve this policy, that Business Innocent Insured or the Insured Firm will give written notice immediately, along with the fullest information obtainable, during the policy period to:
Lawyers Insurance Fund
5th Floor, 845 Cambie Street
Vancouver, B.C. V6B 4Z9
Attention: Kate Jenkins, Claims Manager
FAX: (604) 682-5842
Such notice is necessary to settle, or defend, any claim or anticipated claim against you which may be covered under this policy.
7.2 If a claim is made or suit is brought against the Business Innocent Insureds, they will forward immediately to us every demand, writ of summons or other process with the fullest information obtainable.
7.3 We shall deem notice of an error or claim given by an Individual Insured who is or was a member of the Insured Firm under Part A of the Compulsory Policy to be notice given on behalf of the Business Innocent Insureds and the Insured Firm.
In any claim or suit in which we provide a defence under a reservation of rights or where our interests may be in conflict with yours, each party will have the right to obtain advice from counsel other than counsel we appoint to defend you. In this event, each party will bear its own costs for such advice.
9. OTHER INSURANCE
9.1 This insurance is reduced by any payment under the policies referred to in Declaration 3.
9.2 This insurance is excess over any other valid and collectible insurance, or right of indemnity, other than those policies referred to in Declaration 3, whether primary, contributing, contingent or otherwise, and we will not pay any loss or claim until such insurance or recourse is exhausted.
9.3 Condition 9.2 does not apply to insurance specifically arranged to apply as excess insurance over the insurance provided by this policy.
9.4 If the Business Innocent Insureds or any non-member lawyer practising in the Insured Firm has lawyers professional liability insurance (other than insurance specifically arranged to apply as excess insurance over the insurance provided by this or any other Canadian jurisdiction’s policy) under another Canadian jurisdiction’s policy (or Canadian jurisdictions’ policies) that applies to a claim covered by this policy, the total amount of insurance provided under these policies, together, will not exceed the total value of the claim or the most that is available under either (any one) of these policies alone, whichever is less. The decision as to which of these policies shall respond, or as to any allocation between (or amongst) the policies, shall be made by us together with the other Canadian jurisdiction, and the Business Innocent Insureds agree to be bound by the decision. For clarity, a Reciprocal Jurisdiction is also a Canadian jurisdiction.
10. SOLE AGENT
The Insured Firm is authorized to act on behalf of all Business Innocent Insureds with respect to giving or receiving notice of cancellation, and agreeing to any changes in this policy.
In the event of any payment under this policy, we shall be subrogated to all the Business Innocent Insureds’ rights of recovery against any person or organization and the Business Innocent Insureds will do whatever is necessary to secure such rights. The Business Innocent Insureds will do nothing after loss to prejudice such rights.
12. CANCELLATION OF POLICY
This policy may be cancelled by the Company for non-payment of premium by providing 15 days prior written notice to the Insured Firm. This policy may be cancelled by the Insured Firm by surrender thereof to the Company or by written notice to the Company stating when thereafter the cancellation shall be effective. The mailing of notice by regular mail shall be sufficient proof of notice by the Company or the Insured Firm. The time of surrender or the effective date and hour of cancellation stated in the notice shall become the end of the policy period. In the event of this policy being cancelled by the Company or the Insured Firm, the earned premium shall be computed for the period in force on a pro rata basis. Notice of cancellation by the Company to the Insured Firm shall be deemed notice to all persons insured under this policy and payment of an unearned premium to such Insured Firm shall be for the account of all persons insured under this policy. Premium adjustment may be made either at the time cancellation is effected or as soon as practicable after cancellation becomes effective, but payment or tender of unearned premium is not a condition of cancellation.
IN WITNESS WHEREOF, we have caused this policy to be executed.
|LSBC Captive Insurance Company Ltd.
Susan I. Forbes, QC, Secretary