The deductible, which is $2,000 per licensee, is only payable if E&O pays damages on your behalf. No deductible is payable if only defence costs are incurred. If a brokerage and a licensee under its supervision are both found liable, each pays a deductible of $2,000 for a total of $4,000.
Sometimes individual licensees may enter into agreements with their brokerages to assume responsibility for payment of the brokerages’ deductible obligations. These agreements are between the licensee and brokerage; regardless of this type of agreement, E&O will hold each party responsible for their respective deductible.
For a second paid claim within two years, the individual licensee’s deductible doubles to $4,000. If a claim is dismissed at trial, you do not pay a deductible even though E&O has incurred defence costs.
