What happens when an innocent error results in a $4,351.36 claim?
Apr 24th, 2020 | By FCT
When the lawyer responsible for receiving the closing funds from clients located in the Cayman Islands for the purchase of a property in Ontario, mistakenly provided the wrong wiring instructions, his clients incurred out-of-pocket expenses to the tune of $4,351.36 CAD.
The lawyer discovered his error when following up on the incoming funds. He found out that the funds were sent to the wrong bank. To resolve the error the receiving bank had to send the funds back to the clients in the Cayman Islands, who then had to resend another wire, this time with the correct wiring instructions. The impact of fluctuating exchange rates and wire transfer fees resulting from the initial error cost the clients an additional $2,702.71 (Cayman Dollars).
Naturally, the lawyer’s clients sought to be compensated for their loss.
Fortunately, the lawyer has E&O Complete with FCT. E&O Complete applies to both commercial and residential deals and provides two levels of protection. The first is for claims greater than $10,000, where the policy will cover any deductible or claims history surcharge levied by the mandated primary errors or omissions insurer. The second level of protection is for claims under $10,000 where the policy covers the liability of the insured arising from an error or omission in providing legal services.
After reviewing the case, FCT determined that while the lawyer did indeed make an error in providing legal service, he was fully covered under FCT E&O Complete. Accordingly, a cheque in the amount of $4,351.36 was issued payable to his firm.
The clients are duly compensated, and the lawyer avoided paying out of his own pocket.
No matter how careful you are, we all make mistakes. It is reassuring to know that when you do make a mistake, however innocently, FCT’s E&O Complete is there as a safety net. To find out more about the policy, please visit us here.
SPOTLIGHT CLAIM | $4,351.36 paid
A layer mistakenly provided wrong payment instructions to clients located in the Cayman Islands for the purchase of a property in Ontario. By the time the correct banking information was provided, the clients were impacted by increased exchanges rates along with additional transfer fees.