September 25, 2009 by Canadian Underwriter
A continuing increase in the number and costs of claims, a decline in investment income and the anticipated affect of the harmonized sales tax have all caused the Lawyers’ Professional Indemnity Company (LAWPRO) to increase its base premium for next year, according to LAWPRO.
Ontario lawyers will pay a base premium of Cdn$2,950 per lawyer for professional liability insurance in 2010, compared to Cdn$2,450 in 2009, according to a LAWPRO release.
Many lawyers will pay significantly less than this base premium, with some paying as little as Cdn$1,595, depending on practice and coverage options selected.
The Cdn$500 increase includes Cdn$200 related to claims development, Cdn$150 decline in investment income and Cdn$150 additional annual cost for HST, LAWPRO notes.
“Claims-related costs account for more than 85% of LAWPRO’s annual budget,” the release reads. “The number of claims reported annually and the cost of resolving claims have been steadily increasing.
“The total cost of resolving claims reported in a given year was once in the $55- to $60-million range but is expected to be about $88.4 million for claims made in 2010.”
Legal, investigation, defence and indemnity of claims fees will increase by about Cdn$3.2 million for claims in 2010 alone due to the planned implement of HST on Jul. 1, 2010, LAWPRO notes.
“LAWPRO’s annual program administration expenses will also increase by about Cdn$250,000 per year (Cdn$125,000 in 2010) because of the HST,” the company notes.
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