November 21, 2018
What is ALIAdvisory?
As a private practice lawyer participating in Alberta’s mandatory indemnity program (the “indemnity program”), you have been receiving emails from the Alberta Lawyers Insurance Association (“ALIA”), called an ALIAlert. An ALIAlert is an urgent notice, for example, of a potential fraud that is currently circulating in the legal community. ALIA is pleased to advise that lawyers indemnified under the indemnity program have avoided falling victim to fraud by reading and following the ALIAlerts. To view the latest ALIAlerts, click here .
This electronic newsletter, called ALIAdvisory, contains helpful information and resources of a more general and less urgent nature.
As always, ALIA looks forward to your feedback. Please email us if you have any comments or questions.
Cybercrime and Other Data Breaches: Protect Yourself and Clients with Insurance Coverage
Cybercrime is on the rise in Canada. Lawyers are considered valuable targets for hackers, not only because of the funds they hold, but because they may possess sensitive information about corporate acquisitions and other strategic transactions, intellectual property and pending litigation. Lawyers may also be targeted because of the clients they represent.
The indemnity program covers participating lawyers against negligence and misappropriation in accordance with the terms of the policy, but it does not currently provide coverage against cybercrime.
ALIA recommends that all lawyers in Alberta obtain cybercrime coverage.
To make purchasing cyber insurance easier for Alberta lawyers, ALIA has arranged with its Broker, Aon Reed Stenhouse , to make available a robust cyber policy called the Beazley Breach Response Policy (the “BBR Policy”) that Alberta lawyers may purchase. Cyber insurance can also be obtained from almost every commercial broker or from the Canadian Bar Insurance Association/Lawyers Financial (“Lawyers Financial”) and from the Canadian Lawyers Insurance Association (“CLIA”). It is important to note that cyber products do vary and not all products provide the same coverage.
Closed Claim Letter Survey Now Online
On July 1, 2018, ALIA’s Closed Claim Letter Survey transitioned online to make the process faster and easier. A link to the survey will now be included in the closing letters that are sent to lawyers when a claim is closed. 
The survey is designed to gather input from lawyers who have had a claim; the feedback will be used to help ALIA continue to improve its claim management.
ALIA encourages all lawyers who receive a Closed Claim Letter to complete the online survey and provide us with valuable feedback that will ensure we are meeting the needs of lawyers participating in the indemnity program.
Misappropriation Impacts Everyone
In 2017, seven lawyers were responsible for the 18 misappropriation-related claims handled by ALIA. The impact of these actions goes beyond the money ALIA pays to compensate those who have suffered losses due to the unethical actions of a small number of insured lawyers.

Mortgage Fraud Claims Are Down, But Lawyers Should Remain Cautious
In 2017, ALIA had no new reported claims related to mortgage fraud. This is a big change from when mortgage fraud was headline news in Alberta and across the country. However, Alberta lawyers need to continue to be vigilant against all fraud and negligence, including mortgage fraud.

ALIA's 30th Anniversary
In June 1988, ALIA was established as a wholly-owned subsidiary corporation of the Law
Society of Alberta. Over the years, ALIA has evolved to better meet the needs of lawyers in private practice in Alberta. ALIA would like to thank everyone who has supported ALIA over the past 30 years. ALIA is committed to continue to resolve claims in a fair and reasonable manner and to look for ways to help lawyers avoid and reduce claims. ALIA looks forward to continuing to serve Alberta’s private practice lawyers in the years to come.
"Innocent Additional Insured Provisions" Do Not Grant Coverage for Professional Liability Claims Reported Outside the Policy Period
Alberta lawyers in private practice are required to participate in the indemnity program, operated by ALIA and provided through the Alberta Lawyers' Professional Liability and Trust Safety Insurance Group Policy (the “Group Policy”). The Group Policy is written by the Alberta Lawyers Insurance Exchange (the “Insurer”).
Coverage under the Group Policy is provided on a “claims made and reported” basis, meaning that coverage is dependant upon when the claim is made and reported to the Insurer (and not when the “Occurrence” (as defined in the Group Policy) has taken place. Note that reporting of claims to the Insurer is done through ALIA using a New Claim Report .

Lawyers covered by the Group Policy (“Individual Insureds”) are required to comply with its terms, including the obligation to report any claim or circumstances that might constitute an Occurrence or give rise to a claim, however unmeritorious, to ALIA as soon as they become aware of it. Failure to report a claim or such circumstances (a “potential claim”) on or before the June 30 deadline of the annual Policy term (the “Policy Period”) in which the Individual Insured becomes aware of the claim or potential claim, will result in denied coverage.

It is critical that claims or potential claims are reported as soon as an Individual Insured becomes aware of them, as the Group Policy also provides that once the Policy Period has expired, the Insurer is free from liability if no claim has been made and reported during the Policy Period. The reinsurance that ALIA/ALIEX purchases from third-parties is premised on this requirement.
Part A (Professional Liability Insurance) of the Group Policy contains certain protections for “Additional Insureds” (as defined by the Group Policy), which include present or former partners and/or the Law Firm of the Individual Insured who has caused or is alleged to have caused an Occurrence within the meaning of the Group Policy. These protections are referred to as the “Innocent Additional Insured Provisions”.
The Innocent Additional Insured Provisions protect Additional Insureds in situations where the Individual Insured is denied coverage because of fraud or malice, failure to notify the Insurer of the claim as soon as practicable after learning of a claim or potential claim, failing to provide the Insurer with the information it reasonably requires, and/or failing to cooperate.
However, the Innocent Additional Insured Provisions do not grant coverage for claims reported outside the Policy Period. There are no exceptions. For example, even if the Additional Insureds did not know about the claim, and their failure to report the claim to the Insurer during the Policy Period was through no fault of their own, they will not be entitled to coverage. The Innocent Additional Insured Provisions protect Additional Insureds from the Individual Insured’s imperfect compliance with certain policy conditions, but they do not create or expand coverage under the Group Policy where there is none.
Part B (Trust Safety Insurance) of the Group Policy contains similar provisions and participating lawyers are urged to review the Group Policy in its entirety.
The summary contained above is provided for information purposes only and not as legal advice and is qualified in its entirety to the terms and conditions of the Group Policy. The Group Policy contains other terms and conditions which may affect coverage. Members should always review the Group Policy to confirm their obligations in any circumstance.
ALIA looks forward to hearing from the indemnity program’s participating lawyers about this ALIAdvisory and any other communications. Any suggestions f or future publications are always welcome. Please email us your comments or suggestions.