Liability Insurance
In most Canadian regulated professions where services are offered to clients, professional liability insurance is a staple. The College of Patent Agents and Trademark Agents Act includes a legislative requirement for licensees to hold professional liability insurance, which CPATA must enforce. Insurance is a primary way in which CPATA can protect the public interest, as it protects the client in situations where errors and omissions on the part of the agent result in financial loss for clients. It also offers a benefit to the agent and their colleagues by ensuring that resources are available to defend the agent and redress damages.
Who Needs to Have Insurance
- Class 1 licensees who provide services to the public
- Class 2 licensees who provide services to the public (must have
insurance by December 31, 2023) - Class 3 licensees (must be covered by the insurance policy of their
supervisor, their employer or their own policy)
Licensees who do not provide services to the public (for example in-house pracitioners) are exempt from professional liability insurance requirements, regardless of which licence class they hold.
Policy Requirements
Professional liability insurance must meet the following requirements:
- it must be issued by a company licensed in Canada;
- it must cover claims made in and outside Canada;
- it must indemnify the licensee for any civil liability that arises from the licensee acting as a patent agent or trademark agent;
- it must have coverage limits of a minimum of $1 million per claim and $2 million aggregate per year.
Providing or Updating Your Insurance Information
Licensees must provide up-to-date insurance information to CPATA and will be prompted to report on insurance during the annual licence renewal process each year.
Fill in the Insurance Information Form below if:
- your insurance information changes at another point during the year for any reason (including an employment change)
- you are a Class 2 licensee who is required to obtain coverage and provide details to CPATA by December 31st, 2023.
FAQ
In most Canadian regulated professions where services are offered to clients, professional liability insurance is a staple. The College of Patent Agents and Trademark Agents Act includes a legislative requirement for licensees to hold professional liability insurance, which CPATA must enforce. Insurance is a primary way in which CPATA can protect the public interest, as it protects the client in situations where errors and omissions on the part of the agent result in financial loss for clients. It also offers a benefit to the agent and their colleagues by ensuring that resources are available to defend the agent and redress damages.
CPATA took a risk-based approach to insurance and consulted industry experts and practitioners in the process of establishing requirements.
The College hired an independent risk management and actuarial consulting firm to perform an analysis and make recommendations. Axxima included in this review the UK regulator of P&T attorneys, and the most widely available commercial insurance programs for P&T agents in Canada and the UK. They made 16 recommendations regarding insurance to CPATA in this report.
In July 2021, CPATA published a consultation paper outlining its proposed approach to the insurance requirement. Some licensees engaged with the details of the proposal, before the CPATA Board of Directors made its ultimate decision. Out of 16 insurance requirements the firm suggested, CPATA only selected 4, taking as light a touch as possible to minimize the burdens to practitioners, and ultimately clients.
CPATA also only required licensees with a higher risk to have insurance, namely class 1 or class 3 licensees who provide services to the public. It excluded those who work in government or as in-house agents.
No. Licensees who do not provide services to the public (for example in-house pracitioners) are exempt from professional liability insurance requirements, regardless of which licence class they hold.
Class 2 licensees who provide services to the public must have insurance by December 31, 2023 and provide those details to CPATA by filling out the Insurance Information Form before December 31, 2023
In considering the requirements for coverage, the CPATA Board of Directors was mindful of approaches adopted in the United Kingdom, which recognize that IP practice is global.
Typical Canadian patent and trademark agency practice, unlike legal practice, involves extraterritorial aspects because clients often seek foreign patent and trademark protection and rely on their Canadian agent to access foreign legal regimes. While Canadian agents often retain and instruct foreign associates on behalf of their clients, it is naïve to assume that agents merely act as a conduit for communications between their clients and foreign associates . For example, Canadian agents advise clients in defining the scope of trademark and patent rights to be protected in other countries, and assist in the filing of applications defining those rights, whether by instructing foreign associates or by filing applications that extend rights into other countries
Because of this, the Board determined insurance coverage must cover claims wherever they are made. The Board recognized when a Canadian agent gives advice to a Canadian client, that advice will implicate non-Canadian law because of the reach of the rights involved.
CPATA is aware of the following insurance providers which offer coverage that may meet CPATA’s requirements:
- Canadian Lawyers Liability Assurance Society (CLLAS)
- Chambre des notaires du Québec
- Coalition Insurance
- Fonds d’assurance responsabilité professionnelle du Barreau du Québec
- Intact
- Lawyers Indemnity Fund
- MAGNES/Lloyd’s
- Sovereign Insurance
- Victor Canada
- XL Specialty Insurance Company
CPATA recently contracted Axxima, an independent risk/insurance management an actuarial consulting firm, to do an in-depth analysis of the five law-society insurance programs.
Law Society Insurance Programs that DO meet the College’s requirements:
- Fonds d’assurance responsabilité professionnelle du Barreau du Québec (Barreau)
- British Columbia Lawyers Indemnity Fund (LIF)
- Magnes Program offered through IPIC
Law Society Insurance Programs that DO NOT meet the College’s requirements:
- Lawyers Professional Indemnity Company (LawPRO)
- Alberta Lawyers Indemnity Association (ALIA)
- Canadian Lawyers Insurance Association (CLIA)
Read the full report here.
Please contact us.
In addition to the professional liability insurance required by CPATA, licensees should understand and evaluate professional and personal risks relevant to their practice and consider what insurance coverage may be prudent. This can include protection in case of cyberattacks, data theft, business interruptions, personal illness, property damage, employment litigation and more. Read more in this article.