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Professional Liability Insurance

We recently had a discussion with a member who experienced difficulty in obtaining the insurance coverage he required for his consulting firm and small laboratory. His firm specializes in "Environmental Air Quality".

The major problem was obtaining Professional Liability (Errors & Omissions) Insurance and the following questions arose from our conversation:

  1. How do the risks of a consulting chemist differ from those of other professionals such as an architect, consulting engineer or doctor?
  2. How can professional liability insurance be obtained for a chemical laboratory?
  3. What coverage do the Quebec and Alberta chemists have?
  4. What professional liability insurance is required for Professional Engineers in Ontario?


    5. We asked Bill McKenzie of Sinclair-Cockburn Insurance Brokers to comment on these questions, which he has done as follows:

  5. In our opinion the professional liability insurance risks presented by the "Consulting Chemist" are similar to those presented by any other professional consultant who provides services to the public.

    The primary purpose of PLI is to protect the consultant from the risk of severe financial loss as a result of engaging in the pursuit of their profession, where such loss arises out of an error, omission or negligent act or alleged error, omission or negligent act. An error, omission or negligent act is the trigger for all professional liability insurance.

    In providing the professional liability insurance, the insurer expects a high standard of professional ethics from the consultant, who must operate within the bounds of their competence.
  6. PLI for laboratory operations would be provided in conjunction with the coverage for the "Consulting Chemist or Chemists" who own and operate the laboratory. For example, the "Named Insured" under the policy would be the "Consulting Chemist or Chemists" and the "Laboratory Name" if it is a sole proprietorship or partnership.

    If the Laboratory is a limited company the "Named Insured" would be the limited company, with the coverage being provided for all Officers, Directors Shareholders and employees of the company.

    PLI would only be available for a laboratory which is owned and operated by a qualified "Consulting Chemist" who is a member of the ACPO.
  7. Encon Insurance Managers Inc. presently have a PLI Programme in force for the Quebec Association.

    Encon previously provided a programme for the Chemical Institute of Canada which was discontinued due to lack of support.
  8. The Professional Engineers of Ontario (PEO) requires that all holders of a Certificate of Authorization to provide consulting services to the public, maintain PLI to follow minimum limits:

    Limit per claim: $250,000.
    Aggregate Limit: $500,000.
    Deductible: Maximum of $5,000. or 5% of annual fees whichever is the greater.

Consulting Engineers can purchase their PLI from an insurer of their choice and file evidence of the insurance with the PEO. Sinclair-Cockburn have discussed the possibility of providing a PLI Group Programme for all members of the ACPO, with several insurers, who have expressed interest in participating in such a programme. Encon is one of these insurers.

Prior to proceeding with specific details of coverage and premiums, we require an indication of the number of members of the ACPO who would be interested in participating in such a PLI Programme. Various aspects of the coverage would be negotiated with the ACPO.

If you are interested in participating in a PLI programme, please fax your comments, concerns and name to : ACPO office

Tel.: (416) 364-4609 (local) 1-800-260-0992 (Canada and US)
Fax: (416) 860-0580