LAWPRO is raising insurance premiums for lawyers next year. The Lawyers' Professional Indemnity Company said that the continued rise in the number and cost of claims, a decline in investment income, and the expected impact of the introduction of a harmonized sales tax all make a premium increase necessary in 2010.

Ontario lawyers will pay a base premium of $2,950 per lawyer for professional liability insurance in 2010, an increase of $500 compared to 2009.

Many lawyers will pay significantly less than this base premium, with some paying as little as $1,595, depending on practice and coverage options selected.

Claims-related costs account for more than 85 per cent of LAWPRO’s annual budget. 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.

The planned implementation of the HST on July 1, 2010, will increase legal and other fees associated with the investigation, defense and indemnity of claims by about $3.2 million for claims made in 2010 alone. LAWPRO’s annual program administration expenses will also increase by about $250,000 per year because of the HST.