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Professional Services
Meet the Law Society's insurance rule, then cover the parts of your practice it leaves out.
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A licensed paralegal in Ontario must carry professional liability insurance under Law Society By-Law 6, with limits of at least $1 million per claim and $2 million per year, unless an exemption applies. That policy is the floor. Most practices also need commercial general liability for clients in the office, cyber and privacy breach cover for client files, crime cover for trust money, and an office package with business interruption.
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Licensed paralegals in Ontario must carry professional liability insurance under Law Society By-Law 6, with at least $1 million per claim and $2 million per year, unless an exemption applies. Paralegals who practise in partnership with lawyers must buy it from LAWPRO. Everyone else buys in the open market, and it is up to you to make sure the policy meets the by-law and covers every service you offer.
The mandatory policy is a floor. It does not cover a client who falls in your office, ransomware on your file server, or a spoofed email that diverts trust money. We build the rest of the program around your practice: excess E&O, general liability, cyber, crime and office cover, as part of our business and professional services practice.
In Ontario, paralegals are licensed by the Law Society of Ontario (LSO) to provide legal services directly to the public. Section 12(1) of Part II of By-Law 6 requires every holder of a Class P1 licence to maintain professional liability insurance, unless exempt, under a policy issued by a company licensed in Ontario that is comparable to the policy LAWPRO issues to lawyers. The by-law sets the minimum terms.
| Requirement | What the by-law says | What to check on your policy |
|---|---|---|
| Limits | At least $1 million for each claim and $2 million in the aggregate per year | Whether defence costs reduce the limit, and whether your files justify more |
| Deductible | A maximum deductible that is reasonable in relation to the paralegal's financial resources | That you could pay the deductible on two claims in one year |
| Scope | Errors, omissions and negligent acts arising from legal services authorized under a P1 licence | That every service you offer, including family legal services if you are an authorized provider, is inside the definition |
| Extended reporting | 90 days from the date the policy is cancelled | Whether longer run-off is available when you retire or close |
| Law Society as additional insured | For reporting claims and receiving notice of cancellation or amendment | That the endorsement is on the policy, not just promised |
| Cancellation notice | At least 60 days written notice to the Law Society | That your insurer's wording matches |
The LSO also says each individual paralegal must be named as an insured on the policy or by endorsement, and that an authorized Family Legal Services Provider's policy must explicitly cover the family legal services in their scope. Our professional liability guide explains claims-made coverage, retroactive dates and defence costs in detail.
LAWPRO, the Lawyers' Professional Indemnity Company, runs the mandatory program for Ontario lawyers. It insures paralegals only in one situation. Under By-Law 6, s. 12(1.1), a paralegal who is a partner with lawyers in a firm, or a shareholder in a professional corporation that also has lawyer shareholders, must buy professional liability insurance from LAWPRO. LAWPRO says those paralegals have a maximum of $1 million per claim and $2 million in the aggregate, and that the limits apply to claims expenses and indemnity payments together.
Every other paralegal buys in the open market, directly from an insurer or through a broker. The LSO puts the responsibility on you to make sure the policy meets By-Law 6 and covers the legal services you actually provide. That is where comparing wordings matters: the minimum terms are fixed, but definitions of legal services, exclusions, deductibles and defence cost treatment are not.
Section 12(2) of By-Law 6 exempts some paralegals, including those not providing legal services in Ontario and those employed by a single employer that is not a licensee or licensee firm who provide legal services only to that employer. Other exemptions cover certain legal clinic, government-funded not-for-profit and public service roles, some with their own comparable insurance condition. It is your responsibility to review the by-law and claim the exemption if it applies.
Proof runs through LSO Connects. The LSO says insurers and brokers cannot report insurance on your behalf: you enter the details and upload your certificate of insurance yourself, when first licensed, before you start providing legal services, before any change that affects the requirement, before your policy expires and on the anniversary of your last filing. A paralegal who doesn't file can be listed as "Not Eligible to Provide Legal Services - No Proof of Insurance" in the public directory, and the licence can be administratively suspended. Leaving an in-house role to open a practice is the change we see missed most.
By-Law 6 sets a professional liability floor. It says nothing about the rest of a practice, and the claims a paralegal office actually faces go well beyond negligence on a file.
| Coverage | What it responds to | Why paralegals need it |
|---|---|---|
| Excess E&O | Claims above the $1 million / $2 million minimum | Defence costs share the limit on many policies, and a busy practice can see more than one claim a year |
| Commercial general liability | Bodily injury and property damage to others | Clients and witnesses in your office, and most commercial leases require it |
| Cyber and privacy breach | Breach response, notification, ransomware and data liability | Client IDs, medical records, financial statements and tribunal evidence sit in your files |
| Commercial crime | Employee theft, funds transfer fraud and social engineering | Trust money, settlement funds and retainers attract fraud |
| Office package | Contents, computers, files and business interruption | A fire, flood or building closure stops hearings and deadlines |
| Employer's liability | Claims by staff not covered by workplace insurance | Practices with clerks, assistants or associates |
The scenarios below are hypothetical, built from the kinds of matters paralegals handle. They show which policy would be asked to respond.
| Hypothetical scenario | What went wrong | Policy that responds |
|---|---|---|
| A small claims action is dismissed after the paralegal misses a filing deadline, and the client's claim is now out of time | Diary system failure during a busy month | Mandatory E&O |
| A landlord client loses months of rent after a tribunal application is filed on the wrong form and must restart | Procedural error on a high-volume file type | Mandatory E&O, possibly excess E&O if defence costs are high |
| A spoofed email from a client asks for settlement funds to be wired to a new account | Payment details changed without a call-back | Crime with social engineering cover, if purchased |
| Ransomware encrypts the practice's file server a week before several hearings | No offline backup, no multi-factor authentication | Cyber |
| A client trips on a cable in the waiting room | Premises condition | CGL |
Paralegals who take retainers or handle settlement money are bound by By-Law 9. Under section 7, money received in trust for a client must be paid immediately into a designated trust account, and the by-law requires detailed records, including a monthly comparison of trust bank balances against client trust ledgers, a monthly listing of money held for each client, and a monthly reconciliation of each trust bank account. Section 4 prohibits accepting cash of more than $7,500 from a person on any one client file, subject to listed exceptions.
By-Law 7.1 adds client identification. When a licensee receives, pays or transfers funds, they must verify the client's identity using listed sources, such as government-issued photo ID that is not issued by a municipality. These rules exist because trust money is a fraud target. E&O generally excludes your own dishonesty, so the protection for theft by staff, or for a fraudster who talks the office into a wire, is a crime policy with third-party and social engineering coverage. Call back on a known number before changing any payment instruction.
A paralegal's file often holds more sensitive information than a bank's: tenancy histories, medical evidence for accident benefits and disability claims, immigration documents, criminal records on provincial offence matters. Under the federal Personal Information Protection and Electronic Documents Act, an organization must report a breach of security safeguards to the Privacy Commissioner of Canada and notify affected individuals where it is reasonable to believe the breach creates a real risk of significant harm, and keep a record of every breach.
A cyber policy pays for breach counsel, forensic work, notification and data restoration, and defends claims from clients whose data was exposed. Insurers price it on your controls: multi-factor authentication on email and practice management software, offline backups and staff training. Our post on employee cyber habits covers the controls that matter most.
Most paralegal offices are small, but they still need contents cover for computers, furniture and paper files, and business interruption if an insured loss closes the office. Commercial leases usually require general liability at a set limit with the landlord named as an additional insured. Paralegals working from home need a home-based business policy, because a homeowner's policy restricts business property and client visits.
Many paralegals also apply to be appointed notaries public, an appointment Ontario grants to paralegals in good standing. Your mandatory policy covers legal services under the P1 licence; confirm with the insurer that notarial acts are covered too. Our notary insurance page covers that exposure.
E&O premiums are rated on the areas you practise in, your fee revenue, the number of licensees, your years in practice and your claims history. Small claims, landlord and tenant, traffic and provincial offences, tribunals and accident benefits each carry a different claim pattern, and higher-value or deadline-heavy work rates higher. Excess limits, a lower deductible and broader definitions of legal services all add to the price.
Cyber is rated on revenue, the sensitivity of the records you hold and your controls. The office package is priced on contents values, the building and its location. Conditions currently favour buyers: Marsh's Global Insurance Market Index put Canadian financial and professional lines rates down 4% and cyber rates down 5% in the third quarter of 2026. A documented diary system, written retainers that define scope, and call-back verification on payments are what underwriters ask about.
Paralegals sit within our business and professional services practice. When you are ready, request a quote.
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This page is general information, not insurance or legal advice. Coverage depends on your policy wording and the insurer. Speak with a licensed broker about your situation.
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