Legal services coverage is what distinguishes TitlePLUS coverage from the other title insurance policies generally available in the market for purchasers and lenders.¹

Read on and see what legal services coverage really is and how it affects your deal.

TitlePLUS is available from coast to coast In Manitoba, contact Reider Insurance Services at 204-338-3888. In Alberta, contact Phoenix Group Edmonton Inc. at 780-482-6936 or 1-800-563-5325. In Quebec, contact Dale Parizeau Morris Mackenzie Inc. at 1-877-865-6865.

In the traditional lawyer's opinion method of assuring title, the purchaser/lender relies on the lawyer giving the opinion on title; if a problem is discovered after closing, the lawyer would have to be sued in negligence. However, if the lawyer has acted reasonably in accordance with the standard of practice (or the lawyer couldn't have discovered the problem, as is often the case with fraud), there may not be a valid cause of action.

In a title insurance regime, the client only needs to prove that the problem exists and that the problem falls within the terms of indemnity in the contract (in other words, it falls within the "risks" covered).

For advice-related problems, the client still must often sue the lawyer in negligence even though the client purchased a title insurance policy (for example, if the lawyer neglects to send the mortgage guarantor for independent legal advice).

Under the TitlePLUS policy, title problems as well as advice-related problems for the transaction fall within coverage because of the legal services coverage.¹ Some examples include:

how to take title and the implications; Land Transfer Tax implications; income tax implications; advice regarding the Agreement of Purchase and Sale; chattels with liens; missing an error in adjustments; advice on how to assure title.

Legal Services Coverage:

		insures all services the lawyer provides for the transaction, in case the lawyer commits an error or omission in the transaction for which liability is imposed by law;
		means that the clients cannot be worse off by obtaining TitlePLUS coverage than they would be if they obtained a lawyer's opinion;
		insures the client for the lawyer's advice in the client's choice of title insurance;
		applies regarding environmental and native rights issues, to the extent the lawyer acts negligently.

The TitlePLUS policy specifically covers failure to register documents or remove encumbrances and improper adjustment of any item on closing.

Advantages for the Lender Client of the Legal Services Coverage

The greatest benefit for a client in having the legal services coverage combined in the title insurance policy is that there is no possible gap between the title coverage and a lawyer's Errors & Omissions (E&O) coverage - everything (advice included) falls into the one policy.¹ The client cannot be caught between two insurers who disagree on whether the claim is one that should be recovered under the title insurance policy (because the claim falls within the title insurance contract), or the negligence-based professional coverage provided by the lawyer's E&O policy (because the claim is based on a failure of the professional advice or services provided). Ultimately, the position of the client may be the same whether they recover from the title insurer or LAWPRO. The benefit is in avoidance of a potential conflict over who is to pay.

Availability of recovery against the lawyer (and the E&O policy) may be limited for various reasons, which include the following:

		the lawyer's professional liability policy has a limited lifespan and may not be in force at the date on which the claim is made due to the death, retirement or disbarment of the lawyer; coverage under the TitlePLUS policy is available for the life of the insured's interest in the property, which has the potential to exceed the life of the lawyer's E&O policy or the availability of recovery against the lawyer personally;
		if the lawyer has retired and has run-off coverage, the policy limits on that coverage will in the usual course be reduced, usually to $250,000;
		the E&O policy may not be available if the lawyer has by his or her actions voided the policy;
		the net worth of the lawyer (where the E&O policy is not available or exceeded) may be insufficient to pay the claim.

If a problem with title surfaces after the deal has closed, or if it is discovered that the lawyer made an error or omission, TitlePLUS coverage either:

pays to rectify the problem (for example, moving a garage off a neighbour's property line) or, compensates the appropriate parties for up to the full value of the title insurance policy.2

The insurer also will pay the legal costs of defending the title.

¹ Excluding OwnerEXPRESS^® policies and Québec.
² Please refer to the policy for full details, including actual terms and conditions.