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. 

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.   

A licensee is not required to be insured against professional liability until the end of the year 2022, but must make all reasonable efforts to obtain the required insurance as early in that year as is reasonably possible.  

These requirements were adopted by the Board following extensive consultation with the profession.  

The following programs have confirmed with the College that their programs provide coverage that meets the College’s requirements: 

  1. Magnes Program offered through IPIC 
  2. Law Society of British Columbia Program offered by the Lawyers Indemnity Fund 
  3. The Fonds d’assurance responsabilité professionnelle du Barreau du Québec

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

Click here to read the Axxima Report.

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. 

Please check with that insurance provider directly to ensure that the policy meets CPATA’s requirements. If it does, it will suffice and you do not need duplicate insurance. The insurance must: 

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

The only law society programs that have confirmed with the College that their programs provide coverage that meets the College’s requirements are: 

  1. Magnes Program offered through IPIC 
  2. Law Society of British Columbia Program offered by the Lawyers Indemnity Fund
  3. The Fonds d’assurance responsabilité professionnelle du Barreau du Québec 

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.