Insurance Requirements

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.   

Insurance Requirements

 

A licensee who holds a class 1 licence or a class 3 licence and who provides services to the public, must have professional liability insurance that meets the following requirements:  

  1. it must be issued by a company licensed in Canada; 
  2. it must cover claims made in and outside Canada; 
  3. it must indemnify the licensee for any civil liability that arises from the licensee acting as a patent agent or trademark agent; 
  4. it must have coverage limits of a minimum of $1 million per claim and $2 million aggregate per year. 

CPATA undertook extensive consultation with the profession and experts to establish insurance requirements. 

Class 3 licensees must be covered by the insurance policy of their supervisor, their employer or their own policy. Those who work in government or as in-house agents are exempt from the requirements.   

Licensees must have appropriate insurance coverage by December 31, 2022 and e-mail policy information to admin@cpata-cabamc.ca

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.  

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. 

In an effort to give licensees a buffer period to find solutions that work for them, licensees are not required to have professional liability insurance in place until the end of 2022. While CPATA has asked agents to report on their insurance situation during the annual renewal period, the deadline for insurance is not until the end of the year. 

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.

CPATA is a new national, independent regulatory body. We are in the process of fine-tuning our policies and operations to best meet our mandate of regulating this profession in the public interest. Insurance is an area in which we expect developments in the upcoming year, and a key priority for CPATA. We always find it helpful to hear the perspectives of our licensees. Please reach out to our CEO Darrel Pink at ceo-pd@cpata-cabamc.ca if you have additional information that might be useful to the College as its insurance requirements come into effect.