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ALIA Indemnity Program Extended to Include Cyber Coverage!
Alberta Lawyers Indemnity Association (“ALIA”) is implementing universal cyber insurance for all lawyers who participate in ALIA’s mandatory indemnity program (“Subscribers”). Coverage commences December 31, 2022.
The cyber coverage policy—to be provided by a global insurer and administered by ALIA—is designed to protect Subscribers, their law firms and their clients by giving Subscribers and their law firms quick access to critical resources needed to respond to cyberattacks. It will also cover claims for network security and privacy breaches brought against Subscribers and their firms.
Subscribers and their law firms will not need to submit individual insurance applications or go through an (often onerous) application process to receive this coverage. The coverage will be provided seamlessly and automatically to all Subscribers and their law firms. The annual premium for the first 12 months will be $265 per Subscriber and will be invoiced by ALIA with the 2023–2024 annual levy payment due by June 30, 2023.
In approving the cyber coverage program, the Benchers and ALIA’s Board recognized the importance of universal cyber coverage to protect Subscribers, their law firms and their clients. Lawyers are attractive targets to cybercriminals due to the sensitive, confidential client information stored in the computer systems they use. Cybercriminals seek to extort or steal this information through ransomware and other malware. Cyberattacks can cripple computer systems and block access to files and information, interrupting professional services and exposing client information to criminals. Attempted attacks against Subscribers and their law firms are reported to ALIA regularly, some of which are successful and none of which are covered by the ALIA Group Policy. Every other province except Quebec has implemented some form of mandatory cyber coverage.
ALIA’s research shows that, despite their support for it, many Subscribers tend not to purchase cyber coverage. Cyber insurance can be challenging to purchase, as most cyber insurers have an onerous application process, including network security requirements that can often be challenging to meet. Furthermore, due to increased losses, the cost of cyber coverage has been increasing and some insurers are hesitant to provide coverage to law firms. ALIA’s November 2021 Subscriber survey found that two-thirds of the Subscribers who responded would be interested in including cyber and/or social engineering coverage in ALIA’s indemnity program.
Without insurance, expert resources needed to manage a cyber breach can be difficult to access in an emergency. The cyber program will ensure that all Subscribers have 24/7 access to cyber expertise in the event of a security breach to help restore professional services and reduce exposure to claims for client losses. It will also provide liability coverage for claims arising from cyber incidents. The coverage includes first-party coverage for breach response costs, including cyber extortion, and third-party coverage for claims against Subscribers or their law firms for security or privacy breach. While the financial limits under the cyber coverage program are modest, universal coverage ensures that all Subscribers will have access to the critical breach response resources required to manage a cyberattack.
After many months of research, ALIA, assisted by its broker, Aon Reed Stenhouse Inc. (“Aon”), selected Zurich Insurance Company Ltd. (“Zurich”) to provide the universal cyber coverage program (the “Zurich Policy”). Zurich is one of the top insurers in Canada for cyber risk and currently underwrites cyber programs and provides 24/7 claims service. In addition, Zurich agreed to accept all Subscribers into the program without requiring an onerous application process, meaning all Subscribers and their firms will have coverage.
ALIA intends to continue the cyber program indefinitely. That said, pricing and availability of future policies will depend on the program’s loss history and the cyber coverage market. ALIA endeavours to deliver a high-quality indemnity program in which Subscribers have access to appropriate coverage at a reasonable price and over the past eight years has reduced the levy by 42%. While the cyber coverage will result in a modest increase to the levy, it ensures that all Subscribers have cyber coverage and access to critical resources needed to manage a cyber breach.
Subscribers have an essential role to play in the cyber coverage program’s continuing success by ensuring they practice good “cyber hygiene” to reduce or eliminate cyberattacks. Practicing cyber hygiene includes implementing network security controls to improve online security to mitigate cyber breaches and conducting cyber security awareness training.
ALIA has arranged support for Subscribers to improve their cyber hygiene. The cyber coverage program includes access to regular cyber security seminars that ALIA will host with experts from Aon and Zurich. Topics will include education on best practices to protect Subscribers and their firm from cyberattacks.
All Subscribers must read the Cyber Coverage FAQs to understand what the cyber coverage program does and does not include. Subscribers should also review the Zurich Policy coverage and limits, which information is available to Subscribers through the Law Society of Alberta’s Lawyer Portal. ALIA will also host a webinar with Zurich and Aon in January 2023, to explain the coverage and claims process in more detail. Please watch for further correspondence on the dates of this webinar.
New Filing Procedure in Court of King's Bench
Alberta Lawyers Indemnity Association urges lawyers to familiarize themselves with the new Court of King's Bench filing procedure and the King's Bench Filing Digital Service to avoid claims resulting from missed filing deadlines.
Effective November 1, 2022, documents filed via email at the Court of King’s Bench are considered filed on the date that they are processed and stamped by King’s Bench Administration. If a document is rejected, it will not be considered filed until it is resubmitted and stamped by King’s Bench Administration. This is a change from the previous procedure in which documents filed via email were considered filed on the day submitted, or if submitted after business hours, on the next business day.
Further information about the new Court of King's Bench filing procedure can be found here.
All other email filing related procedures, including naming conventions remain the same. In circumstances where a filing is urgent, the submission must be identified as Urgent and will require a letter on law firm letterhead outlining the nature of the emergency to accompany the filing submission.
Information about the King’s Bench Filing Digital Service and a list of accepted documents can be found here.
In Alberta, claims resulting from missed limitation dates represented 12% of the losses incurred by ALIA over the five years ending in 2021. Many of these claims were caused by not filing a statement of claim on time.
These errors can generally be avoided with the help of a well-constructed limitations system. Further information about limitation systems, and avoiding missed limitations and deadlines can be found here.
Mortgage Fraud Reminder
Alberta Lawyers Indemnity Association has received reports of recent situations which raise concerns about the possibility of mortgage fraud.
In one example, the Subscriber was asked to represent a buyer in a real estate transaction in which the purchase contract was between the seller and a third party who was assigning the purchase contract to the buyer. The seller, an out of province corporation, asked that the original purchase price of the property remain confidential from the buyer. This request is suggestive of a value fraud in which the seller often misrepresents the original purchase price to increase the apparent value of a property.
Every retainer requires competence, candour, and clear communication. Where a third party relies on the client’s lawyer to keep material information from the client, all of these obligations are at risk. The lawyer is also at risk of being the means by which fraud is perpetrated. If the lawyer has any suspicions or doubts about whether they might be assisting the client or anyone else in dishonesty, fraud, crime or illegal conduct, the lawyer should make reasonable inquiries to obtain additional information about the parties and the subject matter and objectives of the retainer. The lawyer should withdraw if they cannot satisfy themselves that the matter is legitimate.
ALIA encourages all lawyers to remain vigilant against fraud when handling all client matters, including real estate transactions.
To learn more about how to avoid mortgage fraud, ALIA suggests that you review the following resources:
Real Estate and Mortgage Fraud - Law Society of Alberta;
Top 5 Ways to Avoid Falling into the Mortgage Fraud Trap - Law Society of Alberta; and
Anti-Money Laundering Risk Advisory: Real Estate (www.lawsociety.ab.ca).
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ALIA does not provide legal advice. ALIAdvisory and ALIAlert communications, the content on ALIA’s website, notices, blogs, correspondence and any other communications are provided for general information purposes only. They do not constitute legal or other professional advice or an opinion of any kind. This information is not a replacement for specific legal advice and does not create a solicitor-client relationship.
ALIA may provide links to third-party websites. Links are provided for convenience only; unless specifically stated, ALIA does not vet or endorse the information contained in linked websites or guarantee its accuracy, timeliness or fitness for a particular purpose.
If you believe you have been targeted by potentially fraudulent activity, please contact ALIAlert.
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