(From the September 2025 Edition of eFORUM)

By Jack Mazakian

Many Canadians believe we’re less litigious than our neighbours to the south. While U.S. court awards often dominate the headlines, lawsuits in Canada tend to be resolved quietly, well before reaching the courtroom, and rarely make the press. But the reality is clear: litigation is alive and well in this country. In some industries, lawsuits are seen as strategic tools used to delay payments, motivate decisions, or negotiate settlements. But when litigation involves professional services, it becomes personal. That’s when advisors need the full support and expertise of their Errors & Omissions (E&O) insurance provider. Early in my career, I encountered just such a situation, one that drove home how critical it is to understand the role your E&O coverage plays and when to ask for legal support.

The claim that came back

One of my long-time clients, a financial services firm with a team of advisors, was acquired by a bank. Just before the deal closed, the firm reported several E&O claims stemming from investment losses during a recession period in Canada. Clients, understandably upset about poor portfolio performance, filed complaints against their advisors. Over the years, I had worked closely with the firm to ensure their E&O policy accurately reflected their services, structure, and branding. It was a strong policy from a reputable insurer. But once the bank took control, they also took over management of the claims. Years later, I received a call from a law firm representing the bank. They had questions about the policy, the underwriting process, and the disclosures we had made. They asked me to attend a meeting with the insurer, supposedly as a favour to clarify the details.

What I didn’t expect

Sensing something was off, I contacted my own E&O insurer to report the situation. The claims examiner saw no issue with my participation, so I agreed to attend.

What I wasn’t told was that this would be a formal interview led by the insurer’s outside counsel. I walked into a room where I was subjected to several hours of aggressive questioning, clearly intended to find fault with how the policy had been placed. Fortunately, I had been transparent and diligent throughout the process. I had thoroughly documented everything and ensured full disclosure from the outset. In the end, there was no wrongdoing found on my part. But it was a high-stakes, high-stress encounter and one I won’t forget.

Lessons learned

I suspect the insurer ultimately covered the claims. But the situation exposed a serious gap in how I approached the meeting: I should have had legal counsel with me.

As a newer professional at the time, I lacked the experience to fully understand the risks I was facing. I was unaware of the behind-the-scenes dynamics between the bank and the insurance company, and how I might be used as a scapegoat.

Today, I emphasize the following lessons in every risk management seminar I deliver:

• Never face a claims-related meeting alone. If you’re asked to provide information or attend a meeting, insist on legal representation.
• Document everything. Good recordkeeping and process adherence are your best defence.
• Report issues early. The moment you sense something could escalate, notify your E&O insurer. They can’t help if they’re unaware.
• Be honest. Your insurer is there to guide and protect you — but only if they have the full picture.

E&O insurance is more than a policy — it’s your safety net. Claims processes can be long and uncomfortable, but with the right preparation and the right support, you won’t have to navigate them alone.

Jack Mazakian is vice-president of Advocis Broker Services Inc.