New Indemnity Plan effective April 1
Indemnity Plan RE0421 replaces Indemnity Plan RE0420 and will apply to new claims reported to E&O on or after April 1, 2021.
That date also marks the beginning of E&O’s 34th policy year. Your annual premium of $350 ($700 for the two-year licensing period, payable when you next renew your license) has remained unchanged since 2011. The clear benefit of stable and cost-effective coverage through the E&O self-insurance program is all the more evident when compared to significant increases in insurance premiums in the private market.
Maintaining such low premiums depends mainly on the continuing care that you take to avoid causing losses. Doing things right works to the continuing financial benefit of everyone in the profession.
What you should know
There have been no changes to the wording of the Indemnity Plan compared to last year’s Plan other than a minor housekeeping change in Condition 8, which deals with how coverage disputes under the Indemnity Plan are handled. The Indemnity Plan wording refers to the “British Columbia International Commercial Arbitration Centre” which has been renamed the “Vancouver International Arbitration Centre” (VanIAC) effective September 2020. The “domestic commercial arbitration rules” which applied under the current Indemnity Plan have been revised by VanIAC and renamed the Domestic Arbitration Rules. This amendment to the Indemnity Plan is simply to make the Indemnity Plan consistent with the changes at VanIAC and in part reflects the changes of procedure introduced under the new Arbitration Act which came into force September 1, 2020.
The Indemnity Plan continues to provide you with $1 million in coverage against negligent errors and omissions that may occur in the course of your activities as a real estate licensee.
Please take a few moments to familiarize yourself with the terms in the Indemnity Plan. You can find the wording and general information on E&O, including FAQs and instructions on how to report a claim, on our website, using the password eno.
We continue to save resources by foregoing the mailing of hard copies of the Plan to licensees, but you can download or print a copy from the website at any time.
Excess insurance
Each year we remind you of the importance of periodically reviewing your insurance needs. Depending on your particular situation, you may need excess insurance coverage that exceeds the $1 million in coverage provided by the Indemnity Plan. Confirm with your managing broker what kind of insurance your brokerage has, and if additional coverage is appropriate in light of the risks to which you are exposed. This type of coverage is purchased by the brokerage, not the individual licensee.
If you’re involved in transactions that put you at higher risk, such as the provision of real estate services involving multiple similar properties, selling commercial, development or waterfront properties, or working in areas where real estate prices are particularly high, you are at higher risk of facing claims that exceed the $1 million policy limit in the Indemnity Plan, and obtaining excess insurance would be wise.
Remember that there may be significantly less than $1 million available to pay damages in a complicated or hard-fought claim, because the legal fees incurred in defending you are paid first against the limits of coverage.
Provide your excess insurers with a copy of the E&O Indemnity Plan to ensure that they’re aware of the terms of coverage.
Excess insurance policies may also provide additional coverage, such as cyber insurance or limited protection against the legal defence costs of disciplinary proceedings.
CGL insurance
Comprehensive general liability (CGL) insurance is essential for every brokerage and agent. It provides coverage for bodily injury and physical property damage to third parties, including risks arising from your premises as well as any showing or listings. Ensure that the brokerage CGL policy extends coverage to independent contractors and not just brokerage employees.
Licensees acting as strata and property managers may or may not have coverage for bodily injury claims under their clients’ insurance policies. Brokerages providing strata or property management services should ensure that their licensees have this coverage under the brokerage CGL and/or excess policies and that these policies also extend to independent contractors.
For additional coverage, we recommend that you consult with an insurance broker who has experience in placing insurance for real estate brokerages and who can advise you about your needs and options. Check out additional information on excess insurance and a list of insurance brokers.
You may also find the article useful, Risks and insurance for the real estate licensee by Bill MacLeod.
