Excess insurance, and when it can be necessary
Excess insurance will protect you from claims that may exceed the amount of coverage available under the Indemnity Plan.
Although the $2 million limit provided by E&O will protect real estate licensees for the majority of claims you might face, it may not be enough to protect you and your brokerage if you are involved in higher risk transactions. If a mistake you make in the provision of real estate services leads to a claim that will cost more than $2 million to defend and pay, both you and your brokerage are at risk.
KEY: Any legal fees incurred in defending a claim are paid first against the limits of coverage, so in a complicated or hard-fought claim, there may be significantly less than $2 million available to pay damages.
Typically, excess insurance is purchased by a real estate brokerage, not individual licensees. This type of policy would come into play after your limits with the Indemnity Plan are exhausted and also may cover risks that the Indemnity Plan doesn’t cover, such as bodily injury or defamation claims. You can also buy insurance policies, such as a commercial general liability policy, developed by commercial underwriters to protect the brokerage and its licensees for risk that E&O doesn’t insure.
We recommend that you review the amount of coverage your brokerage has in light of the risks you could face. Examples of transactions that could put you at higher risk of facing claims that will exceed $2 million include providing real estate services involving multiple similar properties, selling commercial, development or waterfront property, or working in areas where real estate prices are particularly high. If you do these types of transactions, you should consider excess insurance.
For more information, see “Risks and insurance for the real estate licensee” by Bill MacLeod and Rob McLeod.
Consult an insurance professional for advice
To get an accurate, comprehensive view of the risks and coverages you or your brokerage might require, we always recommend that real estate licensees consult an insurance broker to discuss whether excess coverage might be right for your situation.
Talk to your own insurance broker, or consult one of the insurance brokers listed below*, who provide excess professional liability coverage to BC real estate licensees and might be able to tell you about coverage for risks we don’t insure.
| Axis Insurance Managers | 778-228-1789 (contact: Rob McLeod) |
| Johnston Meier Insurance Agencies Group | 250-541-2135 (contact: Stephanie Heng) |
| Peake & Richmond Ltd. | 604-922-0181 (contact: Jim Richmond) |
| HUB International Insurance Brokers | 604-269-1888 (contact: Jordan Fellner) |
| Marsh Canada Limited | 236-330-6057 (contact: Will Cowan) |
*This list is provided only to assist licensees interested in buying excess insurance. It is not intended to be an exhaustive list, nor in any way an endorsement of any insurance broker.