Trust shortage liability provides some protection for lawyers caught by the "bad cheque" or other "social engineering" scams.

Lawyers can take steps to reduce or eliminate the risk of falling victim to the "bad cheque"  or other "social engineering" scams in which fraudsters try to trick lawyers into willingly paying funds out of trust through the intentional misrepresentation of some material fact. 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.


  1. More detailed information about the insurance, initially introduced to respond to the "bad cheque" scam, is in the Spring 2012 Insurance Issues: Program Report. In 2017, the insurance was expanded to include other social engineering scams. More detailed information about the expanded coverage is provided in the Spring 2017 Insurance Issues: Program Report.
  2. Comprehensive risk management material is available from the "bad cheque" scam and the "social engineering" scams pages.