The professional liability insurance contract must clearly indicate the coverage amounts. The regulations prescribe the minimum coverage amounts and maximum deductible amounts for each way of carrying on business.

• Independent representative, representative acting on behalf of, but not employed by, a firm, firm or independent partnership with three or fewer representatives:

  • $500,000 per claim
  • $1,000,000 total per year
  • $10,000 deductible

• Firm or independent partnership with four or more representatives:

  • $500,000 per claim
  • $2,000,000 total per year
  • $25,000 deductible

The deductible stipulated in the professional liability insurance contract for independent representatives, firms and independent partnerships may be greater than the maximum amount allowed, provided that the insured maintains at all times liquid assets at least equal to the amount stipulated in the contract.

The professional liability insurance policy must cover:

• liability arising from the fault, including gross fault, errors, negligence or omissions ("defaults") committed by an independent representative, a firm, a representative acting on behalf of, but not employed by, a firm, or an independent partnership in the pursuit of their professional activities
  • Note: coverage respecting gross fault may not be excluded from the contract. However, gross fault does not have to be explicitly indicated in the professional liability insurance policy, as gross fault is included in fault if it is not excluded;
• defaults committed by the partners (in the case of an independent partnership), mandataries, employees or trainees of representatives of an independent representative, a firm, a representative acting on behalf of, but not employed by, a firm, or an independent representative

• liability of such individuals in the performance of their duties, regardless of whether they are still so engaged on the date of the claim. They do not need to be named as insureds in the policy, but they must be included in the coverage of the independent representative, the firm, the representative acting on behalf of, but not employed by, a firm, or the independent partnership on behalf of which they are acting

Although a professional liability insurance policy may be issued in the names of two or more insureds, each named insured must benefit individually from the minimum coverage amounts prescribed by regulation. Therefore, a coverage limit cannot be shared between two or more named insureds.

A professional liability insurance policy must be issued for a period of at least 12 months.

A policy may be issued for a period of more than 12 months for the purpose of aligning the policy expiry date with the renewal date of the representative’s certificate or the firm’s, independent partnership’s or independent representative’s maintenance of registration date. In this case, the coverage amounts must be adjusted to reflect the period of use in order to be consistent with the regulatory requirements.

The Civil Code of Québec This link will open in a new window requires the insurer to refund any overpayment of premium if the professional liability insurance policy is cancelled (whether by the insurer or the insured).

The professional liability insurance contract must provide that the coverage will extend beyond the period of insurance set out in the contract for a further term of five years in respect of all the activities contemplated by the coverage where a representative acting on behalf of, but not employed by, a firm ceases to pursue activities, temporarily or permanently, whether or not the person has died. A similar extension is required for an independent representative, a firm or an independent partnerships, but from the time that registration is revoked, cancelled or suspended, whether or not the firm or partnership as been dissolved or whether or not the person has died.

The clause extending the coverage period must be incorporated into the professional liability insurance contract and not be subject to the discretion of the insured or the insurer. Upon the occurrence of the event concerned (cessation of activities, death, cancellation, revocation or suspension), the insured must be able to automatically benefit from the five-year extension, and the insurer must grant it without conditions.

This extension of coverage must apply, in the case of an independent representative, firm or independent partnership, from the date the AMF cancels, revokes or suspends its registration or, in the case of a representative acting on behalf of, but not employed by, a firm, from the date on which he or she ceases to pursue activities.

The professional liability insurance contract must include a “consistency” clause stating that the insurance contract is considered to include coverage at least equal to the coverage required by regulation—namely, the Regulation respecting firms, independent representatives and independent partnerships This link will open in a new window or the Regulation respecting the pursuit of activities as a representative This link will open in a new window.

The insurer must notify the AMF:

• of its intention not to renew a contract or to cancel (terminate) a contract 30 days prior to the date of non-renewal or cancellation (termination);
• upon receiving notice of non-renewal or cancellation (termination) from the insured;
• upon receiving any claim, regardless of whether the insurer decides to honour it.

A Québec endorsement is a document that may be attached to the professional liability insurance policy if a contract underwritten by an insurer does not meet the regulatory requirements for Québec.

The endorsement may, among other things, specify the sectors and ways of carrying on business covered, using the correct terminology, and the applicable coverage and deductible amounts. The endorsement may also contain the mandatory clauses, including the “consistency” clause, as well as specific provisions pertaining to the severability of the insurance contract, the five-year extension of coverage, and notices to the AMF.

As set out in the Code civil of Québec This link will open in a new window, defence costs and interest on the proceeds of the insurance are borne by the insurer over and above the proceeds of the insurance. They must therefore be excluded from the amount of coverage.