HRPA Professional Liability Insurance Webinar Delivered: May 15, 2014

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1 HRPA Professional Liability Insurance Webinar Delivered: May 15, 2014 The following questions were taken from the record of questions submitted during the live webinar. Questions that were similar in nature have been answered only once below. Questions & Answers: 1. If I work as a human resources professional, but I am also a paralegal and do mediation, would my HR Professional Liability Insurance cover my whole practice? Most policies will only cover your services in your capacity as a human resources professional. If you provide additional services beyond that you may need additional insurance coverage. You should check with your insurance provider to determine which services are covered and acquire additional insurance to cover any other services you provide, if needed. 2. Do you need insurance if someone simply wants advice on what they should do or how they should act? If you advise someone on what they should do or how they should act, you provide consulting services. If you provide any consulting services, even on an occasional or volunteer basis, you need to have professional liability insurance. 3. How long does a company have to make a claim after you have completed the work? It depends. The basic limitation period is two years after the claim was discovered or ought to have been discovered. That means that the claimant can argue that even though the work was done years ago they didn t realize there was a problem until now. Additionally, limitation periods can be extended by the courts upon request. As such, it is not possible to definitively determine how long a company has to make a claim once the work has been completed. 4. What if the work you do has to be approved by a Board of Directors and the Board can make changes to your work if they want? It depends on the situation. If you are an employee of the Board and follow their instructions for the work you provide, you are not an independent practitioner. If you provide services as a consultant to the Board, then you are an independent practitioner and are required to have professional liability insurance.

2 5. If I work in research and writing, do I need the same coverage? The insurance requirement applies to independent practitioners. If you don t provide consulting services, even on an occasional or volunteer basis, professional liability insurance is not mandatory for you. 6. Roughly, how much does insurance cost annually? Can you give us an idea of the potential cost of a policy, say with $1million per claim and $2million aggregate? Every insurance company can charge the premiums they feel are appropriate. The premium will also vary according to the limits of the insurance. We have seen premiums from $300-$400 up but please don t rely on this since your insurance application will drive what your premium will be. 7. Do you only need the insurance of you are a CHRP? If you don t have the designation but do consulting work, do you still need the insurance? If you are a member of HRPA and work as an independent practitioner you need to have professional liability insurance whether or not you hold the CHRP designation. The insurance requirement is not limited to CHRPs. 8. Do I need professional liability insurance as an employee? If you are working as an employee you do not need to have professional liability insurance. You should be insured through your employer. 9. If I have professional liability insurance through the Ordre des conseillers en ressources humaines agréés in Quebec, do I still need professional liability insurance if my business is in Ontario? You need professional liability insurance that covers any HR work you do in Ontario as an independent practitioner. You should contact your insurance provider in Quebec to determine whether HR work completed in Ontario is covered by their policy. If not, you will need additional insurance for Ontario. Either way, please provide proof of coverage to HRPA. 10. What are the implications if a company still wishes to use the services of an independent consultant that doesn t have professional liability insurance? It would be a breach of the Rules of Professional Conduct. You cannot contract out of the requirement for professional liability insurance. Page 2 of 6

3 11. Can you provide a list of suggested insurance providers? Information about how to find an insurance broker can be found on page 5 of HRPA s Professional Liability Insurance Guide. 12. Why is there a requirement that the insurance company should inform HRPA of changes to the policy? Shouldn t the member be accountable for informing HRPA of any changes? The member is accountable for keeping HRPA informed of any changes to their insurance policy. Requiring the insurance company to also communicate any changes to HRPA simply provides additional assurance. 13. As an HR systems consultant who also consults in other HR areas, will I require two separate professional liability insurance policies or should one suffice? It depends on what your professional liability insurance policy covers. That is something you should discuss with your insurance broker, who can assist you with finding an insurance policy that addresses your particular situation. 14. If I am not currently working, but plan on doing HR consulting work down the road, what should I do? If you are not currently working as an independent HR practitioner, you don t need to have professional liability insurance. You need to obtain professional liability insurance before you start providing consulting services, even if you only provide those services on a part-time or volunteer basis. 15. Does the professional liability insurance provided by LMS Prolink through HRPA s affinity program meet the standards outlined in this webinar? The professional liability insurance policy provided by LMS Prolink was designed to meet the needs of HR consultants in independent practice. 16. What happens when you retire from the profession? Are you required to keep the insurance in place for a specific time in case a claim is made against you by a previous client? The professional liability policies available in the insurance marketplace are almost always provided on a Claims Made form which means that only claims reported to the insurance company while the policy is in force will be covered. If you do not maintain your professional liability insurance policy after retirement and you are unfortunate enough to receive a claim after the expiry of your policy then you have no coverage. If you have knowledge of any situation or circumstance that you believe could possibly result in a claim report it immediately to your Page 3 of 6

4 insurer and certainly before the policy expires. It is therefore recommended that you do maintain coverage after retirement for a period of time adequate to provide for enough time to pass when a claim for your past work will not be likely to arise. Some insurers have a special provision for retirement coverage called a Discovery Period where the premiums are reduced. 17. What range of monthly/annual premiums should we expect for professional liability insurance? Every insurance company can charge the premiums they feel are appropriate. The premium will also vary according to the limits of the insurance. We have seen premiums from $300-$400 up but please don t rely on this since your insurance application will drive what your premium will be. 18. Does it make any difference if you have incorporated your business? No, it doesn t make a difference. Whether your business is incorporated or not, you are required to have professional liability insurance if you are providing services as an independent practitioner. 19. Why do I need to have professional liability insurance if I only provide consulting services as a volunteer? A claim for professional liability can be made against you regardless of whether you provide consulting services only on an occasional or volunteer basis. To protect the public as well as the member if a claim for professional liability is being made, all members of HRPA who provide any consulting services, even on an occasional or volunteer basis, need to have professional liability insurance. 20. How long does a company have to make a claim after you have completed the work? It depends. The basic limitation period is two years after the claim was discovered or ought to have been discovered. That means that the claimant can argue that even though the work was done years ago they didn t realize there was a problem until now. Additionally, limitation periods can be extended by the courts upon request. As such, it is not possible to definitively determine how long a company has to make a claim once the work has been completed. 21. If I am a Board member, and the Agency has liability insurance for the Board, would that be sufficient? The liability insurance for Board members provided by the agency should cover you for any activities you do as a member of the Board. If you provide HR consulting services outside of your role as a Board Member, those might not be covered by the insurance policy. You should check Page 4 of 6

5 with your insurance provider to determine what the policy covers. If the policy only covers Board activities you would need additional professional liability insurance. 22. I work across Canada and I also have clients oversees. Would that be covered by professional liability insurance? It depends on your policy. You should talk to your insurance broker to make sure that your policy covers any HR consulting work you do in Canada as well as internationally in case a claim is made against you overseas. 23. I conduct investigations of harassment complaints and then provide an opinion to the employer on whether harassment has occurred. The employer can accept or reject my opinion and can take any action he or she feels is appropriate. In those circumstances, would I still need professional liability insurance? If you provide any consulting services, even on an occasional or volunteer basis, you need to have professional liability insurance. 24. Would professional writing and speaking on HR topics such as Employment Equity be covered by professional liability insurance? Any consulting services you provide in the field of human resources should be covered by your professional liability insurance, but you should always check with your insurance broker to check that your policy is right for your particular situation 25. What happens if you change insurers over the years and later a claim is made by an old client? Provided that you had no knowledge of the claim at the time you purchased your current policy, and it s a normal claims-made policy, the new policy should cover the claim subject to all the other terms and conditions of the policy. 26. Are you required to have professional liability insurance if you are assisting non-profit organizations with developing HR policies or if you are volunteering on the Board of a nonprofit organization? If you provide any consulting services, even on an occasional or volunteer basis, you need to have professional liability insurance. 27. Why is professional liability insurance now mandatory? Professional liability insurance has been mandatory for all HRPA members in independent practice since June 1, It is a requirement under the Rules of Professional Conduct. Page 5 of 6

6 28. If I work primarily for one customer and I am on their payroll, but I still want to maintain an independent business, would I still need to have professional liability insurance? If you are a member of HRPA and provide consulting services, even on an occasional or part-time basis in addition to your regular employment, you need to have professional liability insurance. 29. Where can I find more information about HRPA s affinity program with LMS Prolink? Information regarding HRPA s affinity program with LMS Prolink is available through HRPA s Member Savings portal: Page 6 of 6