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When a lawyer’s assumption turned into an unforeseen expense


In late 2019, Sue-Ann Smith*, a lawyer practicing in Nova Scotia acting on behalf of her client, made an assumption that resulted in a taxation error on the statement of adjustments.

Using the information of the previous rather than the current year, she paid an outstanding tax bill, assuming that the client’s account had already been debited for the same amount. This resulted in an overpayment by the client and insufficient credit on the statement of adjustments.

Sue-Ann assumed her client had paid the deficit, but they hadn’t. She paid it out of her own pocket with the expectation that her client would reimburse her, but they didn’t, leaving her out $1,066.16.

Luckily for Sue-Ann, she had an E&O Complete policy with FCT that came to her rescue.

It offers protection for claims under $10,000 where the policy covers the liability of the insured from an error or omission in providing legal services. It also reimburses losses resulting from claims against mandatory errors and omissions insurance for residential and commercial real estate transactions. This includes a standard deductible payment and any increase in premiums.

Mistakes will happen despite our best efforts. Before they do, sign up for E&O Complete and get more protection.


*The name has been changed to protect our clients’ privacy.

Insurance by FCT Insurance Company Ltd. Services by First Canadian Title Company Limited. The services company does not provide insurance products. This material is intended to provide general information only. For specific coverage and exclusions, refer to the applicable policy. Copies are available upon request. Some products/services may vary by province. Prices and products/services offered are subject to change without notice.

®Registered Trademark of First American Financial Corporation.



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