New Indemnity Plan effective April 1:
What you need to know for sure
The Indemnity Plan RE0419 replaces Indemnity Plan RE0418, and will apply to new claims reported to E&O on or after April 1, 2019.
There have been no changes to the wording in the Indemnity Plan compared to last year’s Plan. It 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. The wording and general information on E&O, including FAQs and instructions on how to report a claim, are available to you on the website, using the password eno.
To save money and paper, we aren’t mailing hard copies of the Indemnity Plan to licensees, but you can download or print a copy from the website at any time.
Good time to review your coverage
It’s a good idea to review your insurance needs periodically. Depending on your particular situation, you may also need comprehensive general liability insurance coverage and/or excess insurance coverage.
Check with your managing broker to find out what kind of insurance your office has and if that coverage is appropriate in light of the risks to which you are exposed.
Do you need additional coverage?
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 or waterfront properties, or working in areas where real estate prices are particularly high, you’re at higher risk of facing claims that exceed the $1 million policy limit in the Indemnity Plan; obtaining excess insurance would be wise.
Remember that the legal fees incurred in defending you are paid first against the limits of Indemnity Plan coverage, so that in a complicated or hard-fought claim, there may be significantly less than $1 million left to pay damages after fees are paid.
Excess insurance policies may also provide additional coverage such as cyber insurance or limited protection against the legal defence costs of disciplinary proceedings.
Comprehensive general liability (CGL) insurance is essential for every brokerage and agent, as 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 employees of the brokerage.
Licensees acting as strata and property managers may or may not have coverage for bodily injury claims under their client’s 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. Find out more about excess insurance and a list of insurance brokers.
You may also review the article by Bill MacLeod, “Risks and insurance for the real estate licensee.”
You can help keep rates low
April 1, 2019 marks the beginning of E&O’s 32nd policy year. Your annual premium of $350 ($700 for the two-year licensing period), payable when you next renew your licence, has remained unchanged since 2011. Less than a dollar a day for your professional liability coverage is pretty good value.
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.